Are the Bad days coming back???

US Jobless claims higher, are any more bad news on the way??? Was my last articles name……..

The bad days will be back again in the Global markets. Euro has temporarily bounced back but the changes of Euro zone going bankrupt has not been phased out. No change in the US jobless claims indicates that there has been no change in the US markets.

Chicago Federal Reserve Bank President Charles Evan said the risks of a double-dip US recession have risen in the last six months. While he added he did not think that was the most likely scenario, he said high unemployment and a fractured housing sector would make the recovery a fragile one. Asian stocks fell on Wednesday, with Japan's Nikkei at a 16-month low, as investors sold riskier assets after a spate of worrying US economic data, while the yen slipped from a 15-year high on a report Tokyo was considering weakening its currency. But even if Japan's government acted alone to try and halt yen strength, dealers were skeptical it could reverse the growing unwillingness among investors to take risks that has underlined the yen's 10 per cent rise against the dollar so far this year.

The US housing market is taking a turn for the worse.

Tuesday's report from the National Association of Realtors about sales of previously occupied homes is expected to show sales plunged in July. Economists are predicting as much as a 26 percent drop from a month earlier to a seasonally adjusted annual rate of 3.95 million. That would be the worst month for sales in more than a decade.

Many say the market is hurting because buyers and sellers are in a standoff over home prices. Sellers have unrealistic expectations about their home values and are listing properties on the high end.

The Japanese Nikkei was down 1.66%, on reports of its export growth slowing for a fifth month in July and the appreciating yen against the dollar. It had touched a new 15 year high and that caused some panic amongst the investment community as a siring yen is detrimental to the export oriented Japanese economy.

Buyers are afraid home prices will start falling after being flat nationally for about a year and even rising in some parts of the country. The housing market is also being hampered by a weakening economic recovery. Unemployment remains stuck at 9.5 percent and many prospective buyers worry they might not have a job to pay the mortgage. Prices are low, but that's largely because foreclosures are running about 10 times higher than before the housing bust. And while mortgage rates are at the lowest levels in decades, many people can't qualify because banks are being selective in the tough economy.

Major Indices closed down nearly1.7% each. Midcap and Smallcap Indices also tanked this week, loosing nearly 2% each. Name whatever group, it crashed this week. Except the Oil refining companies surged ahead and out perform the Major Indices. Bpcl & Ongc were up by 12% & 5% each. Banks and the Infra stocks had their bad week on the street. Hdfc Bank tanked nearly 3.4% and Icici bank & Kotak bank corrected 3.2% & 2.5% each.

Some of the midcap stocks outperformed the markets. Indswift Lab surged 35% while Surya Pharma was up 30%. Natco Pharm stock was up 16%. India witness above average rainfall in this season, this might be the reason for which major small cap and Midcap fertilizers could see some good rally.

Markets remained very volatile for the week. Nifty made its new 52 week high but ended up with sharp correction and triggered its lower trendline also. Nifty at the close of the week made an intraweek high and low of 5549 & 5391. Last week’s recommendation (Nifty for the upward movement need to close above the 5490 levels). I had mentioned that the Nifty if triggers the lower trendline then we might see some serious correction.

(But if the Nifty close below the trendline we might see serious correction). Nifty on Friday closed below its 20DMA and took support at its 50 DMA.

I had also mentioned that the (“Any bad news in the Global markets can prove to be a salvage point for the Indian markets. Stay cautious; don’t take much open position in the market. Intraday trades are advised.”). There is not such bad news in the Indian markets except the growing inflation and the corruption. Indians are used to corruption and for govt has promised to get control over the inflation within 3 months, irrespective of actual prices coming down, the inflation index will surely come down. HAHAHA.

In the last week RSI had take support at the trendline but triggered the downtrend and continued to fall. MACD also showed negative divergence. Nifty will find support at 5375 -5350 levels.

This weeks call

Short Abb below 757. SL 775.

Buy Zee Ent with SL of 290.

Short Unitech below 77 with SL of 80.

Short Tech Mahindra below 654 with SL of 668.

Buy Tata steel close above 513.

Short Tata Power tgt 1200

Short Sbi below 2785. SL of 2780

Market ended a volatile session in the red for 2nd day in running as traders squared positions ahead of August F&O series expiry today. Weakness in global markets kept bears active. Selling pressure was seen across the board with midcaps and small caps worst hit. Nifty closed at 5462, down 43 points. Open interests are on the high side, indicating that leveraged positions are higher in the market. Metal stocks fell as metals declined on LME by almost 4% in the last six days. TISCO is weakened by 3.2% & Hindalco shed 2.9% at Rs 163. Metal demand is already a matter of concern. Auto stocks weakened too. Nifty future closed at 5465 with 2 points premium. Open interest (OI)I for 5600 Nifty call & 5300 remained highest.

Telecom, pharma, & FMCG space can show good up move in the short-term. Yesterday Idea Cellular moved up by 4.5%. Bharti & R-COM are expected to follow. Bharti above 335 can reach Rs 370. R-COM target is around Rs 200. There is supports for Nifty around 5450 & thereafter approximately every 50 points down. A breach below 5350 would be confirmatory of end to the intermediate up trend that started from 4786 on May 25 & went to the 5549 on Aug 23, just 2 days back. If so, a fall to 5100 may happen. It may end around 5250. If Nifty remains above 5350, it can hit 5550-5600. Supports exist at 5455-5460 & 5410. Do not hold long position below 5450. Yesterday both DIIs & FIIs were sellers. DIIs have been consistent sellers while FIIs have been net buyers during last 3 months, which coincides with duration of intermediate uptrend. If the FIIs become net sellers, an intermediate downtrend is more or less guaranteed. We expect a flat opening to-day.

Markets are likely to venture more into the red terrain today mainly because of
a lack of any major positive cues from the global markets.
The domestic markets made a soft start on Wednesday, particularly as global
cues weren’t too supportive, but fortunately enough, the markets did not slip
down further like some of their Asian counter parts. The continuous weak
economic reports from the US markets have raised the concerns of double dip
recession and has made the global markets worried. Investors believe that if
there is a weakness in largest economy it will ultimately impact the other
nations as well. Asian indices continued their bear run on Wednesday as the
markets closed in the red, bleeding to touch new lows. The Japanese Nikkei
was down 1.66%, on reports of its export growth slowing for a fifth month in
July and the appreciating yen against the dollar. It had touched a new 15 year
high and that caused some panic amongst the investment community as a
siring yen is detrimental to the export oriented Japanese economy. The local
equity markets slipped further in the mid-morning session on the back of
persistent selling pressure in select heavyweights on valuation concerns. Weak
regional peers also weighed down the market sentiment in trade. The Indian
equity markets oscillated in a tight range, and were then able to limit losses due
to a recovery in most of the European markets. Although the markets were still
in the negative terrain near the closing period, the markets managed to recoup
some of the losses on the back of a positive opening of European markets,
providing the much needed fillip to the local markets, though the European
markets too succumbed to selling pressure few minutes after opening in trade
today. The benchmark equity indices traded in a volatile manner on concerns
raised by RBI that inflation, which has remained stubbornly high for several
months, was a major near term challenge for policy makers, though it sees a
very strong medium term outlook of the Indian economy. The Indian market
ended in red for the second straight trading session on Wednesday, with the
BSE Sensex closing at 18,179.64 down 0.72% and the NSE Nifty dropped
under 5,500 and eventually closed at 5464.95 with a loss of 0.78%.

US Jobless claims higher, are any more bad news on the way???

US Productivity falls for the first time in 18 months. Jobless claims in US climb. Initial jobless claims rose by 2000 to 4.84 lacs in the week ended Aug7, the highest level since mid Feb. Companies in the US might definitely be loosing confidence in the economic recovery, so might not be hiring.

Greece GDP shrinks for 7^th Quarter and unemployment rose as the wage cuts and tax increases that aim to trim the European Union’s 2^nd biggest budget deficit deepened a recession. GDP shrank 3.5% from a revised 2.3 pace in the 1^st Qr.

Industrial production for the month of June expanded at 7.1% the slowest pace in 13 months. After declining for 2 consecutives weeks, food inflation shot back to 11.4% during the week ended July 31. Disruption in supplies on account of floods ion some parts of north India, rise in food prices globally, costlier cereals, fruits and milk are said to be the reasons behind the rise. Last week the Inflation was at 9.53%.

Markets had been very very volatile for the week. There was hardly any contribution from the Largecap stocks, except few stocks. SBI counter witnessed a power pack rally on back of better that expected results. On the other hand RIL Ind stocks fell on rumors of sell of treasury stocks. Midcap and Smallcap stocks were the star performer of the week.

Nifty and the Sensex closed flat. Midcap and the Smallcap Index were marginally high from their previous weeks close. In the Index gainers JSPL closed up by 6.2%, HUL 4.2%, ONGC 3.8% and Cairn surged 3.3% on stake sell news. Sterlite Ind closed down 8.9%, M&M closed down by almost 3.5% on Ssangyong buyout news. Rcom corrected 2.9%.

Real Estate Index was the star performer, surging nearly 6%. DLF closed 5% up and Unitech 3.5%. Banking Index also closed higher by 3.3%. SBI rallied the most on back of excellent quarterly numbers. Closed higher by 9%. ICICI Bank & BOR board finally approved the merger. Auto Index closed up 2.6%, with Tata motors contributing the most. T. Motors closed 13.4% higher and Hero Honda up 3%. IT index was the only looser of the week by closing in red. Index lost 1.5% on week on week basis. Wipro and Infosys counter saw profit booking and closed down by nearly 3.5% and TCS by 1.5%.

Some select midcap stocks did see a pretty good movement through out the week. Raymond jumped 55% on rumors on land sale and settlement between the management and Union Leaders. Bombay Deying too had a pretty good rally, which surged almost 16% in the week. Century was up 10.5%. IBreal post quarterly results also closed higher at 14.5%, HDIL was up 7.5% and Arvind mills by 7%. Major Textile stocks closed higher. Jet Airways rallied 10% & GMR Ind ws up 8.2%.

On the first day of the week markets surged and made a new 30 weeks high. Nifty after making an intra day high of 5492 closed down at 5486. For consecutive 3 days after that markets corrected and Nifty made a low of 5372 and closed almost flat at 5416. Nifty on 12^th Aug bounced back from the lows and closed marginally in red. A Doji like pattern was made on that day and Nifty closed at its 20 DMA and above the trendline. The day after that i.e. on the last day of the week Markets opened up in green with a gap, rallied for most of the day but corrected some points post lunch session.

Nifty took support at the trendline. In the chart I have marked the last few weeks, Nifty movement. Nifty for the upward movement need to close above the 5490 levels. RSI have also taken good support at the trendline. And bounced back. Nifty on the last day of the week have given some positive signal and further movement can be seen in the coming week. But if the Nifty close below the trendline we might see serious correction.

The only worry is the downward movement of the trendline as compared to the Nifty movement. In the last two month the Nifty movement has been upward but the RSI have been negative. This was the same where the Markets were at its all time high. Any bad news in the Global markets can prove to be a salvage point for the Indian markets. Stay cautious, Don’t take much open positions in the market. Intraday trades are advised.

FII’s have been buyers for the week while DII’s are regularly booking profits at every levels.

Last Weeks call

Sell Baja Auto below 2700 levels. SL 2720. made a low of 2534.

Sell BOI with SL of 438. SL tirggered

Sell BEL with SL of 1767. made a low of 1723.

Buy HDFC with SL of 3030 made a high of 3120.

Buy Ibreal above 174.5. made a high of 198.

Sell Relcap with SL of 796. made a low of 753.

Indian markets continued to bleed. Sensex lost almost 150 points today and Nifty was down by 40 points on back of Global sell off post Fed meet. Global markets were also down almost 1-1.5%. Indian markets after an superb rally in the near past, started correcting after reaching its 30-month high. Nifty after making a high of 5492 corrected and will continue till it reaches 5400 levels. RSI has been giving negative signal and MACD is giving negative divergence. If the Nifty breaks the trendline 1 then we might see some more correction.

Markets at 52week and Indian Politics are best on their cheating skills…

Yeah we all know this Heading is actually very different from the usual articles in this News paper. But atleast the readers of this News paper should be made aware that the Indian Economy will soon be counted in the list of the bankrupt economies of the world. Now there seems to be not limit for the manipulation in India. Name any event or any sports or anything, there is no loyalty in any one.

Finally the markets are at their 52 week high. Markets continued its rally. As mentioned in my earlier article that the Nifty if closes above 5400 levels then we could see some great movements upside. FII remained buyers for the week but at the same side DII kept on booking profits for the week.

China’s economy will cool off this quarter. Annual gross domestic product will slow to 9.2% from 10.3% in the second quarter and 11.9% in the first. The property prices have surged to unreasonable prices in some cities and out of the people’s reach. Greece is close to next loan as an austerity measures.

Nifty will face resistance at 5537 levels. In the weekly chart we can see that the Nifty is approaching its upper trendline. Decisive breakout above the same can take the Nifty to 5611-5700 levels. But this ride will surely not be so easy.

On Wednesday Sensex closed at its 2 and ½ year high. Sensex made a high of 18295 but closed over at 18143. Nifty made a high of 5487 before closing at 5431. Nifty and Sensex rallied almost 1.5% in a week. Smallcap and Midcap Index performed much better then the major Index, rallied nearly 2.5%. IT stocks were the best performing stocks in the lot. IT Index surged 2.8%. Wipro, HCLTech surged almost 5%, while TCS & Infosys gained 3% each. Banking Index was up 2.1% with 5.2% gain in Kotak Bank. Some of the midcap and Smallcap stocks fared far better then the other frontline stocks. Essarshipping was up almost 35% in a week. Abhishek Ind up 30%, Gitanjali charts showed good breakout pattern upwards and rallied 17%. Hathway cable & Dishtv were up almost 20% with the new policy. Mercartor & Petronet were up 12% each.

There were some losers also in the Index. Sail lost 3.8%, while Reliance Power and Rcom dropped 3.5% each. In the Midcap Reiagro was down 25% while IFCI & RNRL tanked 5%.

FII remained buyers to the tune of Rs.2000Cr while DII sold nearly Rs.790Cr. Despite of FII buying in the markets, Sensex and Nifty closed in red on the last day of the trading session. Investors booked profits on the last two trading sessions. Inflation for the week still remained high and there are still cautions in the market that the Interest rate hike will surely be there in the near future.

In the weekly chart we can clearly see that the Nifty will surely face some resistance levels on the upside. Nifty will face resistance at 5537 at higher levels. Breakout above the same will take the Nifty to atleast 5600 levels. According to Bollinger band theory nifty point had reached the higher level and then corrected. Now the Bollinger Bands are contracting. Further movement will be decided on that basis only. Either movement can be there in the market.

Nifty support level will be at 5413 - 5399. Resistance at 5537.

This Weeks call

Sell Baja Auto below 2700 levels. SL 2720.

Sell BOI with SL of 438.

Sell BEl with SL of 1767.

Buy HDFC with SL of 3030

Buy Ibreal above 174.5

Sell Relcap with SL of 796

Keep light

Stay light, yet prepared

In the field of observation, chance favors only the prepared mind. - Louis Pasteur.

Market observers and participants may sigh at the thought of Nifty failing to kiss the 5500 mark. Unless the global sentiment improves substantially, the psychological mark may prove elusive even today. All eyes are on the monthly payroll report, to be released in the US later today. A surprising increase in weekly jobless claims pulled Wall Street lower overnight. Stock benchmarks in Europe finished mixed. Asian markets too are flat to slightly negative.

Given this backdrop, we expect another sluggish start and perhaps another dull session. Traded volumes have been tepid and may remain so today as well. Much of the action has shifted lately to the non-index counters. But, beware of illiquid stocks with questionable background. The Nifty may consolidate further in a tight range. Stay light and have a relaxed weekend.

Results Today: Dlink, Edserve, ENIL, Fortis Healthcare, Gammon Infra, HMT, ICSA, NALCO and Power Grid Corp.

FIIs were net buyers of Rs730.2mn in the cash segment on Thursday (provisionally), according to the NSE web site. Local funds were net sellers of Rs1.87bn. In the F&O segment, they were net buyers at Rs21.89bn.

In key developments, the ECB and the BOE have left key rates unchanged besides keeping stimulus in place. Though ECB president Jean-Claude Trichet has noted progress in the economy and stability in markets he says it is too early to declare victory. The Fed and BOJ policymakers will meet next week while back home we will get the latest IIP data. Separately, Russia has announced a temporary export ban on grains after a severe drought decimated the country’s crops. Wheat prices rallied sharply on that news.

India remains in a sweet spot due to its relatively sound economic fundamentals. A good monsoon has only added to the confidence levels though inflation and rising interest rates could post a few hiccups going ahead. Liquidity is unlikely to be an issue for our markets given that matured economies are yet to make an exit from their ultra-loose monetary policy. Since earnings this time have been mixed investors will be a bit reluctant in committing fresh money given the rich valuations, especially in large caps.

Globally, the situation remains precarious, and several headwinds remain to be conquered. US may need another round of stimulus even as it leaves rates steady near zero. Japan may also announce fresh monetary easing. Though ECB may go ahead with a gradual exit, rates will stay at record low. The UK too is likely to keep rates at all-time low for an extended period.