The markets declined by another 1.2 pc. They staged a very smart rally on Friday to cover quite a few losses. This current week is going to be a news driven week.The markets would be news driven with a knee jerk reaction either ways depending on the news flow.
1. The RBI Policy is on Monday and there cut be a rate cut of 25 basis points and a CRR cut of another 25 basis points. Last couple of times, markets have reacted negatively to the RBI policy and this time, it may just be a positive surprise. The way the markets rallied on Friday might be a hint of things to come.
2. The Second big event is further clues on the withdrawal of the Quantitative Easing program of the Fed of US. Any further statements on liquidity vanishing may lead to correction.
3. The Monsoons have well and truly set in. This can lead the markets to rise.
4. We have seen a 3 wave decline from 6229. Wave A from 6229 - 5937 = 292 points, Wave B 5937 - 6134 = 203 points, Wave C from 6134 - 5683 = 451 points. Wave C was 1.55 times of Wave A.
5. If the above calculations are correct, then we could have begun a fresh up move. The markets gapped down to 5729 and gapped up to 5739. This leaves an unfilled island of 10 points and this would be the stop loss for all longs. The immediate resistances come in at 5860 - 58880 range and after that at 5950.
6. If we look at my previous analysis, I had mentioned we could easily go down to 5662. We have reached 5683.
7. One of the disturbing features was the mild selling by the FIIs. If that continues, then the rally may be short lived.
In a nutshell, all longs should have stop loss of 5728. The Buy on Dips continues.
1. The RBI Policy is on Monday and there cut be a rate cut of 25 basis points and a CRR cut of another 25 basis points. Last couple of times, markets have reacted negatively to the RBI policy and this time, it may just be a positive surprise. The way the markets rallied on Friday might be a hint of things to come.
2. The Second big event is further clues on the withdrawal of the Quantitative Easing program of the Fed of US. Any further statements on liquidity vanishing may lead to correction.
3. The Monsoons have well and truly set in. This can lead the markets to rise.
4. We have seen a 3 wave decline from 6229. Wave A from 6229 - 5937 = 292 points, Wave B 5937 - 6134 = 203 points, Wave C from 6134 - 5683 = 451 points. Wave C was 1.55 times of Wave A.
5. If the above calculations are correct, then we could have begun a fresh up move. The markets gapped down to 5729 and gapped up to 5739. This leaves an unfilled island of 10 points and this would be the stop loss for all longs. The immediate resistances come in at 5860 - 58880 range and after that at 5950.
6. If we look at my previous analysis, I had mentioned we could easily go down to 5662. We have reached 5683.
7. One of the disturbing features was the mild selling by the FIIs. If that continues, then the rally may be short lived.
In a nutshell, all longs should have stop loss of 5728. The Buy on Dips continues.
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