My friend and I was discussing about the markets on last Sunday. I showed him my last article that I had written in the Informed Investor and he was really surprised to now that the markets were actually surging ahead on the rumors that the Ambani brothers may reunite. Then I explained him that it is not the only reason for which the Indian markets were flourishing. Global markets too faired pretty well in the last week that gave some support to our markets.

Finally the RIL agreed to supply gas to RNRL 8mmscmd/day for 17 years at USD 4.20/mmBtu. It is also learnt that pact entails gas for 8400 MW for power. He asked me a very simple question as in why did RNRL agreed to buy gas from RIL now on the said price, when few months back they did not??? I did not have any answer for the same. He pointed out on the various block deal happened in RIL few months back or else this is just the beginning of the reunion session between the Ambani brothers. My friend told me “ Its better we don’t talk on this complicated matter as of now. Tell me about the future of the market and why did it bounced back in the last week.”

I started my conversation with a big sign of relief as actually talking on the topic of the A’ brothers were very complicated. I told Yeah its better we shift our focus on something else as this matter “God only knows or they themselves”. As we all know that the EU countries are facing the problem and everything is been discounted by now. Global markets bounced back in the last market so did ours. There has been no slowdown in the Indian markets now. Expect the Rupee depreciating there is no other issues in the Indian markets. He paused and asked me “Don’t u think the depreciated rupee will effect the Indian markets?” Yes surely, but still the markets are not looking that bad to me.

He asked “What do u think about the Inflation in India?” I said “That is the 2^nd most talked matter about. Headline Inflation measured by the WPI, has entered the double-digit zone, raising the possibilities of further tightening by the RBI. The numbers released estimated inflation at 10.16 per cent for May, compared with 1.38 percent in the year-ago period, driven by higher fuel and primary article prices. In April, inflation was estimated at 9.59 per cent.

He said now the inflation will surely sky rocket now. I was confused and asked him why are u saying that? He said the deregulation in the fuel price will surely hit the inflation now. On Friday Government decided to free petroleum products. petrol got costly by Rs 3.50 per litre, diesel by Rs 2 per litre, kerosene by Rs 3 per litre while LPG will be hiked to Rs 35 per cylinder.

Rise in the Petroleum product prices will take the inflation rate soaring. I said “As the rising inflation is known by almost everyone and that the Rate hike is also on the cards now, as mentioned in my earlier articles”.

My friend was very keen about how will the Indian markets trade technically in the coming week. Last week Indian markets faired pretty well but this week markets corrected few points. On the opening day of the week markets rallied and closed in green. Nifty after making a high of 5367 closed in red for the week. I showed him my last weeks article that mentioned that the Nifty will rally and will be in the new range of 5325-5375 levels and will face resistance at 5375 levels. This journey will not be so easy. I showed him the technical chart of Nifty. And showed him that the road between the 5200-5400 is rough. Sellers become active in this range. We have seen profit booking happening in this range. I told him we might see some correction even in the next month. Except the global problems, we do not see any issues in the India markets, so we might not feel the heat as the global markets are feeling.

In the chart we can clearly see that the Nifty fell down from the levels mentioned in the last article. Nifty may continue to fall till the time it reaches the trendline below. Break below that levels may spoil the chart pattern and we might see some more correction. That will be only technical correction. Otherwise the Markets are good. RSI had bounced back from the low from the over trading zone to the over bought zone. But in the weekly patter the Nifty had made a small Doji pattern that might call for some correction.

I showed him the Nifty movement from the month of June 2009 to June 2010, which is trading in a Island pattern. Breakout either side will call for very fast movement. The range is 4800-5400. Currently the nifty closed at 5268 after making a high of 5368 levels.

My Friend thanked me for sharing all this information with him. He seemed to be really interested in the topic but his face showed that he was little confused.

Call for the week.

Sell Sesa goa below 365.

BUY Sesa goa only above 385.

Sell ICICI bank with SL of 866.

Only Ambani’s needed in India……

I wish we had some more Ambani brothers…

Yes that’s true. It seems that the Indian markets needed only Ambanis’. The rumors about the Ambani brothers getting together sparked the Indian markets in the week. Mukesh Ambani and ADAG lead stocks rallied the most. Since last 15 to 20 days, I could read only ambani brothers stories in all most all the news papers. Markets men talking only about the Ambani brothers. Major activity in the Ambani brothers companies were as follows.

30 May: Anil Ambani stays at RIL's Sri Krishna Guest House at Tirupati.
31 May: R-ADAG and US-based CBS Corporation to form an equal stakes joint venture to launch a network of television channels.
1 June: MTN and RCOM to resume merger talks.
Shares of JM Financial Asset Management rise on speculation that RIL is considering buying a majority stake in the firm.
2 June: RIL likely to make big-ticket investments in coal-based power plants.
3 June: RCOM likely to sell a strategic stake to fund 3G spectrum acquisition.
Etisalat, AT&T and MTN said to be interested in RCOM stake.
7 June: RCOM board approves a 26% stake sale. The company will also explore M&A opportunities.
8 June: Anil Ambani drops a Rs10,000-crore defamation case against Mukesh Ambani.
10 June: RIL drawing up plans to enter telecom space.
Reliance Power acquires three coal mines in Indonesia for Rs 7,520 crore. 12 June: RIL enters the broadband space, acquiring 95% in Infotel, a big winner in BWA auctions, for Rs 4,800 crore.
13 June: Ambani brothers and their families vacation together at the Kruger National Park in South Africa.
14 June: RIL board approves the group's entry into pharma, power and financial services.
ADAG might buy Star India's 25% stake in production house Balaji Telefilms.
15 June: RCOM board approves restructuring its tower-owning unit, Reliance Infratel, into an independent company. American Towers, GTL and a consortium of Crown Castle and Blackstone, in talks to acquire the unit.
16 June: Reliance Capital (R-Adag) to buy 18% in Bloomberg UTV.
17 June: RIL considering acquisition of a 26% stake in Fortis hospital chain.
RCOM considering selling a 26% stake in its wholly-owned subsidiary Reliance Globalcom.
Mukesh Ambani might invest in R-ADAG firms, including RCOM.

Indian markets surged almost 3 % in the week. Nifty on Monday closed above its resistance level of 5175-5180 levels. Next day the same was broken and the Nifty closed above the 5200 levels after taking support at 5170 levels. On Wednesday Nifty closed at 5233 levels.

In my last article it was mentioned that the Nifty closed above its 100 & 200DMA. Decisive broke out above the same can take the Nifty to 5250 levels. Close above the same will take the Nifty to its next level of 5325-5375 levels.

Its been seen in the past also that whenever the Nifty approaches the 5200 levels, markets men try to short the market in anticipation that the markets might correct. It had happened several times in the past. But this time the scenario is totally different. Nifty according to me will make new high and might cross the 5300 levels.

Yes I have mentioned in the past also that there are still dark clouds in the Global markets and for the Indian markets Inflation is a major concern, But there is no other bad news for create new pressures on the government and this might lead to increase in the interest rate.

On Friday the benchmark Nifty snapped the 7 day winning streak and closed in negative. Ambani brothers stocks lost the most triggering the sell off in the Indian markets. Nifty some how managed to hit the 5300 mark in the intraday trade but closed below the same at 5262. Sensex closed down 46 points at 17570.

Nifty has bounced back sharply from the over sold zone. And closed above its 200 DMA. Nifty resistance levels are at 5325-5375.

BUY Gillette Ind. Cmp 1678.

BUY BOC. Cmp 288.

Still there is lot of steam there in the company pricing. Both the stocks have surged in the near past. Wait for some correction and then buy……..

The only thing that is going in my minds since last few months is that, What will the Government of India will do with the Rs. 40000 Cr which they have planned to raise by selling the stake in their loss making company. The GOI have planned to rope in some investors to sell their 10% stake in the Hind copper ltd. But did anyone seen the companies balance sheet, the PE at which the company is trading. What ever said and done….. But where will the money go into. ALL the corrupt Netas of the nation????

Nifty on Monday closed above its resistance level of 5175-5180 levels. Next day the same was broken and the Nifty closed above the 5200 levels after taking support at 5170 levels. Yesterday Nifty closed at 5233 levels.

In my last article it was mentioned that the NIfty closed above its 100 & 200DMA. Decesive broke out above the same can take the Nifty to 5250 levels. Close above the same will take the Nifty to its next level of 5325-5375 levels.

Its been seen in the past also that whenever the Nifty approaches the 5200 levels, markets men try to short the market in anticipation that the markets might correct. It had happened many times in the past. But this time the scenario is totally different. Nifty according to me will make new high and might cross the 5300 levels.

Yes I have mentioned in the past also that there are still dark clouds in the Global markets and for the Indian markets Inflation is a major concern, But there is no other bad news for the Indian markets.

Welcome to the FIFA 2010 and Global crisis…….

64 matches will be played within 32 countries. $12.64bn amount world cup will pump into South African economy. 695000 Jobs will be created within 31 days of the tournament. 373000 visitors expected in SA. 3.3m spectators will be viewing the match LIVE. 26.3 bn TV viewer ship. With 214 countries watching.

Japan too in the race for bankruptcy… Just chill. There is still no news for the same. But the Prime minister of Japan has given indication about the increase in bad debts.

It’s been a Global recovery this weekend. Indian markets too followed the rally. But the fall in the initial days of the week treble the markets men. Nifty once again closed below the 200DMA but bounced back sharply to close above the 5100 levels. Positive global cues and buying in heavyweights like RIL and leading banks helped the markets to gain in the end of the week.

Markets corrected since the start of the week. As mentioned in my last article that the markets may feel some heat and Indian markets might correct in the coming weeks. Nifty even after closing in the positive zone on last Friday 04^th June, corrected heavily on Monday and Tuesday. Nifty made a low of 4967 below the 200DMA after closing 5135 on 4^th June. Sensex made a low of 16560.

Sensex almost rallied nearly 200 points on Friday but corrected in the post lunch session. The news in the markets was that the Japan Prime minister has hinted about the countries debt. But few articles back also I had mentioned about the debts of the various countries. There was nothing new in the news. It was just another round to panic the investors and trying to short sell or it may be some case of profit booking.

IIP grows17.6% in April vs 13.5% in March. The country’s IIP output rose for the 7^th month in April. There was strong growth in capital goods sector, which rose 72.8% from negative 5.9% on year on year basis. India's Index of Industrial Production (IIP) has maintained its double-digit growth rate for the sixth month in a row in Apr’10, backed by a strong growth in manufacturing and mining sectors, particularly capital goods.

The data enhanced the estimated growth rate for Mar’10 to 13.9% from the earlier 13.5%. The growth rate of the manufacturing sector surged 19.4% in Apr’10, as against 0.4% in Apr’09. The power sector fell by 6% in Apr’10, as against 6.7% in Apr’09. The mining sector grew by 11.4%, compared to the growth of 3.4% in Apr’09. Fifteen out of the 17 industry groups showed a positive growth in April, compared to the corresponding month of the preceding year. During April, the growth rate in six core-infrastructure industries, having a combined weightage of 26.7% in the IIP, was 5.1%, up from the 3.7% in Apr’09, mainly driven by growth in the production of finished steel, petroleum and crude oil.

Euro almost crashed to 1.20 as compared to dollar. Debts in the Euro countries are spreading like a Cancer.

Nifty is once again near its resistance level of 5150-5187 levels. This week also Nifty corrected from almost the same levels. Nifty closed above the 200DMA on Thursday. On Friday, Nifty closed above the 100DMA also. Nifty will continue to find support at the 5000 levels. Nifty will face resistance at 5180-5187 levels.

Is it recovery time or correction time???

Wow it’s been a great recovery in the Indian markets. From the low of 4786 in the last week, Nifty bounced back to close higher at 5000 mark once again. But the worry is still that, will the markets stabilize here??? Not only Indian markets, Global markets flared within the week. Indian markets closed higher for the week. On the last day of the week, European markets were trading higher but as the Indian markets closed the Euro markets tanked.

ECB said Euro Zone banks would need to make provisions for further losses of E90bn this year and E105bn in 2011, on top of some E238bn in debts written off by the end of 2009. After the Lehman Brothers collapsed in Sep 2008, the ECB began offering Euro zone banks unlimited, flat rate loans in a bid to revive inter-bank lending and keep credit flowing to the real economy. Last Friday Spain the 4^th largest Euro Zone economy saw its credit rating downgraded a notch by Fitch Ratings agency from the min AAA to AA+.

Nifty closed higher at 5135 after making a high of 5147. Nifty gained 1.3%. Sensex for the week gained nearly 250 points or 1.5% and closed higher at 17117 levels. Mid cap & the Small Cap Index were the star performer gaining 2 – 2.5%. Smallcap Index was up 1.7%. For the Index gainers ONGC contributed 5%, Ril infra, Rel Cap & Sbi by 4.5% each. Auto stocks flared gaining almost 4.4%. Maruti contributed 8.5%, MNM by 7 & Herohonda by 3.8%.

Telecom stocks did pretty well. Government made a killing by 3G Auction for Rs.68000 CR. But this created pressure on the Telecom companies. Companies raised money from the Banks to pay back the govt. But still the stocks pretty well on the brousers. Rcom surged almost 14% in a week on news that the company is in talks with Etisalat or Merger with MTN. Idea was also in the news that the Mukesh Ambani may take over Idea after the breakup of the agreement with the Ambani brothers. Bharti Aritel jumped 5.5%. Metal stocks were down. Stelite closed lower at 4.8%, JSPL by 3.8%. FMCG Index was up almost 3.6%. HUL surged 6.4% on back of Buyback news and ITC by 2.6%.

Rupee after making a low of 47.7 against Dollar, bounced back to 46.85 levels.

As mentioned in my last article that the Nifty might face resistance at the trendline and the same thing happened. Nifty tanked when it could not close above the trendline on the first day of the week. Nifty made a low of 4961 and closed below 200DMA. But bounced back sharply to cross over the 200DMA and the 100DMA. Nifty broke the 5^th wave and closed above the trendline. As mentioned in the last article the MACD may show some positive up move. RSI also showed strength when it was trading near the over sold zone.

Markets have bounced back sharply on back of Global markets recovery. Most of the markets a man have come in the positive route and expects the markets to continue the upside move for some more time. European markets closed higher on back of the bail out package. But the worry is still there in the global markets. Dark clouds are still there. Any bad news will spoil the sentiment of the Indian markets. Markets may correct in the next week.

Nifty will face stiff resistance at 5150-5187 levels.

BUY Relcap, close above 681.

BUY Infosys above 2735.