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.