The political unrest in Egypt, which threatens to destabilize the oil rich Gulf region, fuelled a rally in oil and Gas exploration company shares on Monday. Markets men expects rally to continue for couple of more days. The higher crude prices will be beneficial to Ongc, Gail, Oil, and Cairn & Ril Ind. Many Indian Fmcg companies will be surely impacted.
Nifty and Sensex have fallen by 10% 2011 ytd on concerns such as high inflation, high crude oil prices, lack of progress in govt reforms, fear of populist moves by Indian govt in the wake of 5 state elections scheduled in May. I believe that while higher inflation may be partly priced, we are yet to see significant selling by foreign institutional investors yet. FII selling can take markets down by 10%-15% more.
After the record inflow in the Indian markets last year, this year since the start has been proved bad for the individual investors. Markets have lost more than 12% in just 1 month. There have been lots and lots of bad news in the markets since the start of the New Year. Political instability fear is also there. Scams have become a routine part of our life. Sebi have cautioned traders or investors to trade carefully in nearly 1900 scripts which are illiquid. 2G scam has roped in many others company which has been tangled with Mr.Raja.
FII have already sold equities worth $1053.50 mn in Jan and continued selling in Feb too. Increasing number of scams in the listed company and the political instability has been the major reason why the FII have been turned sellers in the Indian markets. Rupee depreciated 2.3% vis-à-vis the US dollar this year. In the last few articles this writer had mentioned that these will the main reason why the FII will the selling Indian equities.
Prices of crude oil have gone up to $92 which was around $85 earlier in the weak. It is likely to reach $100 and may be above.
Global markets have been rallying since last week. Dow Jones closed above 12000 for the fist time since 2008. New US claims for unemployment benefits fell sharply last week. Growth in the US services sector in Jan was the fastest in more than 5 yrs. Another sign the economy is started the New Year on a solid grounds. But Indian markets remained lackluster with low volumes and sinked nearly 10-12% since start of the New Year.
This weak Indian markets tanked nearly 2.2%. All the indices have closed in red. IT & Auto index lost nearly 3%. Fmcg and Reality index were the major looser. The index lost more than 6% in a weak.
Inflation is the major concern for the government now. To tackle the inflation the bank rates have to be increased once again in the near future. Reality sector have lost their shine as the sales have nose dive in the last few months. Prices in some places have risen too fast and too much and its out of the reach of the common people. Increase in bank lending rate will surely have an impact on the pockets of the common people.
Finally the Nifty closed below 5400 levels. Nifty did try to close above its 50% retracement levels but failed to do the same. Thursday Sensex surged more than 300 points but the gains were washed out on the every next day. Sensex dropped more then 475 points. Sensex and Nifty close down nearly 2.2% in a week.
This writer have been constantly mentioning that if Nifty closes below the 5700 levels than the next good support is at 5400 only in between there will be small supports. This week Nifty closed below its 5400 after a ‘DEAD CAT BOUNCE’ of 350 points on Thursday. Nifty is still below its 200DMA. This week for the first time nifty close below its 200DMA in last 5 months. Nifty will find support at 5348 but close below the same will take the Nifty to 5232 levels directly. 5348 is a 61% retracement levels.
Viewers can see that Nifty is trading in line with the Fibonacci Retracement levels. RSI is now in the oversold zone.
Last Weeks Call
Short United Phos below 151 SL 153 tgt 146-142. Tgt reached. Made a low of 134.
Buy Union Bank above 328 SL 323 tgt 333-339-342. Made a high of 335.
Short Torrent Power below 235 SL 238. Buy if closes above 241.50. Made a low of 213.
Sell Tata Motor Close below 1182 SL 1192 tgt 1172-1162-1141. Made a low of 1063.
Buy Tata Motor only above 1210. Did not trigger the buy price.
Buy SBI with SL of 2590 tgt 2610-2634. Did not trigger the buy price.
Buy SesaGoa with SL of 330. SL triggered.
Buy Relcom above 138 small resistances at 139. With SL of 134. Did not trigger the buy price.
Sell PNB close below 1125. SL 1133. Made a low of 1051.
Buy Icici bank above 1069 SL 1063.. Did not trigger the buy price.
This Weeks Call
Sell Icici Bank below 990 sl 998 tgt 964.
Sell Axis Bank below 1218 sl 1223 tgt 1201-1995-1182.
Sell Biocon below 340 sl 343 tgt 333-331-320.
Sell Cairn below 320 sl 323 tgt 314-312.
Sell Hcl Tech below 478 sl 481 tgt 470-462.
Sell Hdfc bank below 2005 tgt 2017 tgt 1995-1984-1967.
Sell Hdfc Ltd below 600 sl 605 tgt 592-589-582.
Sell Ibreal below 115 sl 118 tgt 108.
Sell Maruti below 1176 sl 1182 tgt 1150
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