==>> OIL the best for the future.....

Crude is heading towards 150$. Today crude hit 142 $ per barrel, life time high. Again the fear of the announcement of the inflation figure was there in the hearts of everyone. Inflation figures wea 11.42% as compared to 11.05% for the last week. It is not too far when the inflation will be in the range of 12-13%. As the major contributor for the high inflation was the mined articles which rose by whopping 3.6%. Primary articles rose by 0.2%, Fuel power and energy rose by 0.1% manufacturing rose by 0.6%.

In the current week again the bears took the bulls on the roller coaster ride. Sensex opened in the negative zone, down 600 points to make a low of 13760. Nifty closed at 4136 after making low of 4119. Recent low of the Sensex and the Nifty have been tested. Recent low of the Sensex was at 13731 and Nifty at 4093 levels. This is not the first time i have told, to stay away from the Banking and the Real Estate stocks. These sectors are really having a bad time on the brousers. Both sectors were the best performing sectors in the downward movement.

==>> Nifty july futures dicounted by 70 points

Turnover was unusally high for the second successive day with high volatility. We saw high volumes in the 4200 call. The gap between the June and the July Nifty futures was around 70 points. June future saw a great short covering in the end. The was due to short covering in the current month and fresh short built up in the next month future contract. We will see some rude shocks in the month of July. Nifty saw a rollover of around 70%. May series put-call ratio was 1.18 and the June series at 2.34. This simply means that there isa huge demand for the puts options and there are hardly anyone willing to write the puts.

Nifty closed above at 4315. Sensex closed at 14421. We can clearly see in the chart, that the Nifty will have a good resistance. Nifty may again come down to 4050 levels to test the same.

Dont be in haste to buy.

==RBI hikes Repo rate & CRR by Half a point each

In the last few trading sessions I have been constantly informing my clients, that the Nifty will touch 4200 and the close below that will take Nifty to 4050 levels. Yesterday Nifty closed at 4191 and today we saw Nifty slipping down till 4093 levels. Sensex closed at 14223 after making a new low of 13736. In the early session Nifty bounced back smartly and closed above 4250. Till the time Nifty is above 4200 and Sensex above 14000, there is some hope of a slight recovery. Nifty and Sensex are in the over sold zone. Still there is lot to be seen before the Nifty and the Sensex close above the resistacne levels. Dont be in a hurry for the bottom fishing. WAIT AND WATCH.

Nifty will face a stiff resistance at 4440 levels. It will not be so easy to cross the level. As mentioned in my earlier blogs that the RBI will definately increase the Repo rate or the CRR. Repo rate and the CRR have been increased by HALF a point each to control the inflation. By doing this the RBI have laid more bumpy roads for the Individual investor, corporates, stock market investors, Reality developers. Demand for the real estate is just going down. This will definately have a negative impact on the sector. More worst scenario to be seen by the developers.

==>> Nifty to touch 4200 levels.

Now bears have taken a good grip on the markets. As mentioned on this blog that the Nifty close below 4440 will slide till 4200 levels in no time. Today we saw Nifty touching a new low of 4225.5 in recent time. Sensex also dropped till 14163. Both Nifty and Sensex tried to hit my target of 4200 & 14000 respectively.

Fuel prices in India are all set to rise again and the same will be passed on the the end users. But the move will again help the Oil companies to pull them out a bit, from under the burden of flaring crude prices.

Nifty has a good support at 4225 levels. Expect a flat opening today.

SGX Nifty futures dn 7 point at 4281.
Dow futures up 6 points.
US Markets :

Dow -0.33 (-0.00%)
Nasdaq -20.35 (-0.85%)

European Markets :
FTSE +46.4 (+0.83%)
CAC +2.1 (+0.05%)
DAX +11.02 (+0.17%)

Asian Markets:
Nikkei -64 (-0.46%)
HangSeng -167.41 (-0.72%)
Shanghai +7.13 (+0.26%)
Straits -11.01 (-0.38%)

==>> Inflation a big concern for emerging markets.

So here we all are...... Nifty below 4440 and Sensex below 14700. Nifty tried to take support at 4440 but due to lack of buyers and great selling by FII's. Nifty made a new low of 4333 and Sensex at 14520. Nifty closed at 4354 and Sensex at 14590.

Inflation was at 13 yr high at 11%. as compared to 8.8% last week. I expect RBI to hike policy rates , may be CRR hike.

FII’s have net-sold $6 billion of stocks in the last 6 months. On Friday, they sold another Rs.1000 crore, which they will convert into dollars. Within Asia, rupee is the weakest currency. Rupee is expected to touch Rs.47 per dollar by the end of this fiscal. RBI sold nearly a billion dollars worth on Friday to support the rupee. India’s forex reserves are down by $5 billion this week. The rupee should get strengthen to control inflation. Governments around the world are more worried about the raising inflation than global terrorism. Inflation is expected to go up from here. At 17 times India is more expensive than most peers in the emerging markets. Higher inflation rates would lead to further tightening monetary measures including t CRR hike, repo rate hike and along with this the public sector and public sector banks may hike the interest rate to cope with the RBI moves. All this would lead to costlier loans. A stage is set for compression in price earnings ratios. Remember the biggest single day rise in the oil prices of $ 11 to cross $ 139 on June 6th. The spike has not been factored in to the latest inflation data. Expect inflation to rise above 13%.

China and the Indian markets have already made new low against the low that was made in the month of March. Dow is close to make a new low. If the global markets take some rest at the current levels, then we would be able to see some pull back, which is likely not possible as rest of the world is also effected by the raising inflation rates.

Nifty has already closed below the 4440 levels. In the last 2 weeks Nifty had made new low below 4440, but somehow managed to close above the same. But this time the trend has been changed. Nifty may touch 4200 very soon. If the close is below 4200, expect it to fall further till 4050 levels. On June 6th I have clearly mentioned that the Nifty will face resistance at 4680, nifty made a high of 4679.75 and tumbled down till 4637 levels. It will not be easy to overcome this carnage. On June 13th I have mentioned that it’s a buy time with the SL of Nifty close below 4440.

==>> Support at 4625.

Nifty tried to cross the major levels of 4680, but was not successful in doing so. Downside watch out for the major support levels of 4625...

==>> Rest at 4680

In the morning session Nifty tried to cross the major resistance level of 4680, but we saw a slide till 4637 after making a high of 4679.75. Nifty will again try to cross the level.

==>> FII's net buyers in last few trading sessions

As mentioned that we will see pull back in our markets. I have mentioned that invesotrs should buy with the SL of Nifty close below 4440 and Sensex below 14700. We have already seen some pull back from those levels.

Yesterday we saw Nifty rallied till 4664 in the close. Bulls took the front seat and FII's buying helped Nifty and Sensex add some points to their kitty. Sensex closed at 15696, well above the resistance level os 15560. FII's in the last few trading sessions were the net buyer of 2404 Crs.

Nifty has a resistance at 4680-4710. Close above that will definately take Nifty to 4850-4900 levels. Buy Tata steel with the SL of 830. BUy Gmr Infra with a SL of close below 103 tgt 125-139.

==>> Some pull back expected......

Global indices helped Indian markets garner some points in their kitty. Yesterday we saw good rally in our markets. Sensex added 206 points. Global markets keep eye on Saudi meet on June 22. Saudi Arabain oil producers will meet to decide to increase the oil production in a bid to arrest the northbound crude prices. General markets are expecting that Sauda AArabia will increase the oil production by 5 lakh barrels per day. A dip in the crude prices will help the Indian markets to corner some pull back.

As such Nifty charts suggests that the triple bottom pattern is in the making till the time Nifty is not closing below 4440. Sensex close below 14700. Reality shares still actract short positions. Short positions are created in the derivatives contract in the reality sector, on the belief that these shares may fall further, and the worst is still yet to come in this sector. Developers are forced to raise funds at rates that are way above the market rates.

Nifty will face resistance at 4625 and Sensex 15560.

It's a buy time

Start buying in the markets, with the SL of Nifty close below 4440 and Sensex below 14700. Markets are likely to go up from here. Sensex and Nifty tryin to make a triple bottom.

==>> Its time to buy with strict SL

Global markets are in the positive zone. Crude has cooled off a bit now. Nifty in the last few trading sessions makes new low but, closes above 4440 levels. That may be a positive sign. Un till the close is below the same, it’s a good sign…….

==>> Markets still not in the +ve pattern.

Today we saw high voltatility in our markets. In the early session we saw Nifty and Sensex plunging down more then 2%. But recovered smartly in the end to close at 4530 inNifty and Sensex at 15240. As mentioned the nifty has a good resistance at 4538 and the close above the same will take the nifty to 4610, but unfortunately it closed below the same. IIP NO. for this fortnite were good at 7% versus 11.3% YoY. The April manufacturing growth came at 7.5% vs 12.4% YoY.

In the Nifty chart u may see that the Nifty is facing resistance at the trendline. Decisive breakout above the trendline can take Nifty up till 4610. In the yesterdays blog also i have mentioned that we will definately see a bounce back from this levels.

==>> Repo rate raised at 8%, Oil raisen by $4 to reach 135

Yesterday we good rally in our markets as mentioned. In my last blog i have clearly mentioned that the candelstick pattern suggests that we will definately see some pull back, but it is still nt the bullish trend. Nifty still have a good support at 4440. Close above this is still a good sign. Global indices are down by around 2%. American markets are down on on fears that Central banks around the world would increase rates to combat inflation, in turn affecting growth. Oil has once again risen by $4 to reach 135 on more than expected decline in inventory levels.

Reserve Bank of India has decided to increase the repo rate by 25 basis points to 8.00 per cent from 7.75 per cent with immediate effect. There is no change in the reverse repo rate. The year-on-year WPI inflation which was 4.36 per cent on January 12, 2008 (at the time of announcement of the Third Quarter Review for 2007-08) increased to 7.33 per cent on April 12, 2008 (at the time of announcement of the Annual Policy Statement for 2008-09) and to a high of 8.24 per cent on May 24, 2008. Till now the Fuel prices are not included in the WPI. If this is done then we can see inflation in the double digit. To control the inflation this steps are been taken. RBI may again raise in the month of July when it meets for quarterly review of monetary policy.

We saw good short covering in Reliance ind on teh back of the board meeting. The Bullish pattern is still not clear. Traders are adviced to keep their positions light, as we will see gap down opening today. If our index makes a new low then it is a serious matter. SGX NIFTY Future trading at 140 points down. We will definate head towards 4200 Nifty & 14000 in Sensex. This seems to be possible. ALL THE BEST.......

==>> Buying in Index based shares lead the rally

Today Nifty again made a new low of 4369.8. In the last 2 days Nifty has made new lows below previous low of 4448 which was made in the Jan carnage. But luckily the close for both the days was above the same. but the making of new lows can prove to be a bad sign for the market. In the close session, we saw some buying in the frontline stocks, that lead good short covering in the market and the Nifty jumped from the low of 4369.8 to close at 4459.8. Sensex also made a new low as compared to the low that it had made in the month of March (14677). Sensex immediately bounced back after making the new low. The rally that we saw in the closing session was just unrealistic. It was just and attempt to close he Nifty above 4440 and sensex above 14700. The candle stick pattern formation in the Sensex chart shows that we may see a pull back. Both the Nifty and the Sensex are in the over sold zone.

In the yesterdays blog it was mentioned that we will some bounce back. Sensex again opened with the downward gap. But it was not that severe. Inspite of not that great movement in the global indices, we saw some pull back in our markets. Our markets will definately bounce back within a day or so. Will that sustain or no, that is the issue all about??? Futher movement will be decided after 1 or 2 trading sessions.