Nifty did try to close above the resistance level of 4448, but closed below at 4433.55 on 24th July. It was near our resistance trendline also. Same thing happend with the Sensex also. We can clearly see in the chart. I believe the RBI has it's role cut out. Expect Dr Reddy to tighten the noose on liquidity, raise rates and warn of further hikes if the incoming data demands.
In an era of rising yields, we would expect the banking stocks to bear the brunt. Similarly the real estate sector stocks will continue to get the boot for some time. I don't see any reason why some one should like Indian real estate at this time, when the prices in the US have already taken a beating of 16.6%. Dont buy it as an investment, its good for the traders. Why would one want to take a currency risk and face other incidental problems by buying real estate exposure in India, when prices are yet to begin falling in India.
In the U.S., the S&P 500 index dropped 1.9 percent yesterday after the IMF warned that worsening credit conditions may prolong the economic slowdown. Nifty has a good support at 4250 levels. The opening will be week but in the close session we might see some pull back. Buy at lower levels.
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