==>> Is this the end of the correction???

Is the Indian markets bottomed out???? This is the question in everyone’s mind. But this may not be correct….

This is just a technical bounce back from the 4850 levels. Below 4980 levels Nifty finds support at 4850 levels and that was mentioned in my last article. Recovery in the European markets and US futures triggered the pull back in the Indian markets.

In the last week it was mentioned in my article that the Nifty has closed below its 100 DMA. And now, the Nifty is below its 200DMA also. For the first time since April 2009 Nifty closed below the 200DMA on Wednesday.

Euro problems are not seems to be fading out so easily. Some even bets that the problem will not be solved even with the $1tn bailout. On Thursday evening US markets fell sharply on back week data for the first time since the start of the new financial year, which created doubt about the sustainability of its recovery in the second half of this year. Thursday on growing fears the euro zone's efforts to tackle its sovereign debt crisis will fall short, jeopardizing the global economic recovery. The number of US workers filing new applications for unemployment benefits unexpectedly rose last week for the first time since early April. The index of leading economic indicators slipped last month for the first time since March 2009, while factory activity in the US mid-Atlantic region accelerated less than expected in May.

Four Years of delay in the auction of 3G mobile spectrum had bought unexpected revenues to the Government. Govt managed to garner nearly $15bn (68k Cr). The country’s top two mobile firms—Bharti Airtel and Reliance Communications (RCOM)—each won 13 of the 22 telecom zones on offer while other major operators Vodafone Essar, Idea Cellular and Tata won a total of 9, 11 and 9 circles, respectively. Bharti, RCOM and Vodafone won the coveted 20-year licences for Delhi and Mumbai, which account for a lion’s share of the country’s customers and revenues and attracted top bids of Rs 3,317 crore and Rs 3,247 crore, respectively—effectively Rs 166 crore and Rs 162 crore per year of the licence period. The auctions were for a maximum of three operator slots in all but one circle. Staterun BSNL and MTNL will be the fourth operator of 3G services.

Not only the Equity, even the commodities and the currency felt the heat. Gold fell down to $1181. Rupee tumbled to its 27 week low. Rupee closed down at 46.96.

FII’s for the week remained net sellers to the tune of Rs.3700 Cr while DII’s were Rs.1500Cr.

According to the Indian Meteorological Department there will be good Monsoon season. Good Rains would raise farm output, boost rural incomes and lower flood inflation. But at noticed in the past also our Met Dept’s prediction have never been right. So all I could say is “May God Bless Us”. Still if the rains are not good, then will surely see another fall in the Indian markets.

The latest data showed the food price inflation picked up for the second consecutive week in early May 2010. The food price index rose 16.49% in the year to 8 May 2010, a tad higher than the prior week's annual reading of 16.44% as fruit and vegetables prices climbed on the back of a heat wave. The fuel price index was steady at 12.33%, while the primary articles index was up 16.19% versus 16.76%

India's exports rose an annual 36% to $16.9 billion in April 2010 as demand picked up for gems and textiles while imports rose an annual 43% to $27.3 billion buoyed by industrial recovery, stronger domestic growth and rising oil prices

UPA govt has successfully completed its 365 days as the ruling party. This year has been very good for the UPA govt. Government raise money via selling stakes in the govt owned companies. 3G mobile Spectrum sale helped govt garner nearly Rs.68kCr. But the question which rose in my mind is, “Is the govt doing anything for the raise in the corruption levels, raise in the food prices….”

We might see some bounce back as the Nifty is very close to its support level of 4850, but I do not think that it is still the right time to buy in the markets. Indian markets and the Global markets are still in the correction mode. Euro problems are still far from getting solved. Euro countries will still require more such kind of bailout.

But the markets might see some bounce back, as seen in the chart attached together.. A similar of a Hammer like patter was seen. From there the markets had bounced back. Nifty is almost at the same levels with almost the similar type of the candle stick pattern. RSI is closing near the oversold zone. Nifty is closes below the 4800 levels then we could see 4600 levels in Nifty.

Last weeks call..

Short SBI with SL of 2242. Low was 2141 after that Sl triggered

Short Rel capital with SL of 684. Low was 611.

Short Tata Steel below 542. Low 487.

Current Weeks call…

Short TCS below 710

Short DLF below 260