Infosys came up with a poor set of numbers again and that led to the markets tanking on Friday. Overall, the week ended with a loss of 0.4 pc on the Nifty. Let us try and examine what has changed.
1. Crude came down to 102 dollars a barrel and Gold plunged. This will help the Current Account Deficit as the 2 majors imports of India are crude oil and Gold. A falling Gold price will have 2 impacts, one is cost will be less and secondly demand will abate for sometime.
2. Gold seems to have broken quite a few supports. Gold for quite a few past years has never broken its February low for the year. This year it has and that has bearish implications for Gold.I would add Gold either above 1620 USD or below 1400 USD.
3. The next week has a lot of key Results lined up and they will set the tone for the markets. TCS will be a key Result. If it also is poor then the markets will tank. TCS Results should be better than Infosys.
4. The Inflation Data and the IIP data point to a 25 basis points rate cut in May. Gilt funds still remain the safest option for parling money and getting a decet return. They are highest yielding asset class i past 1 year.
5. The markets are below the 200 DMA for about 7 trading sessions. Typically, if it is just a correction they bounce up within 15-20 sessios. Hence, if the markets remain below the 200 DMA for more than 1 week more than we are in for a lengthy time below the 200 DMA.
6. 5650 comes across as a significant resistance and only if the market moves above this, we ca expect a significant rally.
The Strategy remains the same. Buy on dips and stick to good Quality Stocks. The coming week is a curtailed week for the stock markets. Friday is a holiday for Ram Navami.
1. Crude came down to 102 dollars a barrel and Gold plunged. This will help the Current Account Deficit as the 2 majors imports of India are crude oil and Gold. A falling Gold price will have 2 impacts, one is cost will be less and secondly demand will abate for sometime.
2. Gold seems to have broken quite a few supports. Gold for quite a few past years has never broken its February low for the year. This year it has and that has bearish implications for Gold.I would add Gold either above 1620 USD or below 1400 USD.
3. The next week has a lot of key Results lined up and they will set the tone for the markets. TCS will be a key Result. If it also is poor then the markets will tank. TCS Results should be better than Infosys.
4. The Inflation Data and the IIP data point to a 25 basis points rate cut in May. Gilt funds still remain the safest option for parling money and getting a decet return. They are highest yielding asset class i past 1 year.
5. The markets are below the 200 DMA for about 7 trading sessions. Typically, if it is just a correction they bounce up within 15-20 sessios. Hence, if the markets remain below the 200 DMA for more than 1 week more than we are in for a lengthy time below the 200 DMA.
6. 5650 comes across as a significant resistance and only if the market moves above this, we ca expect a significant rally.
The Strategy remains the same. Buy on dips and stick to good Quality Stocks. The coming week is a curtailed week for the stock markets. Friday is a holiday for Ram Navami.
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