==>> Global meltdown continues

On Monday evening US House of representatives rejected Bush's $ 700bn bailout package. Dow Jones closed 770 points below the previous close, its biggest single-day drop in point terms. Nasdaq closed -199 points.On back of Global meltdown, Sensex closed -506 points at 12595. Nifty closed below at 3850.

US had already taken steps for the short sellers to prevent further downtrend in the Financial stocks, Now Korea planning to stop the same. Taiwan and Hongkong seeking the same. India also planning to take preventive steps. As per Leading news paper investors lost around Rs.5 trillion in 2 weeks. Leading US bank Wachovia Corp, which was plannning to buy out Morgan Stanley few weeks back, has now ended up being swalloed by Citigroup. Netherlands, Belgium and Netherlands and Luxembourg joined hands to lend $16bn to prevent the Belgium bank Fortis from gooin bankcrupt. In Germany Hypo Real Estate, the 2nd largest commercial property lender, received E35bn loan guarantee from ther German Government. France and Belgium will help bank Dexia, National City corp, US based may also the same problem.

Indian Real Estate stock prices have come down sharply. Banking sector have also seen a sharp fall in their share prices. Yesterday Nifty made a new low since Jan 2008. Nifty closed at 3850. As the global markets are in deep red, Indain markets will also feel the same effect. Nifty has a good support at 3750, Out markets can bounce back in the late hours.

==>> Wait and watch.

In the last week Indian Indices closed below the previous week's close. Nifty closed marginally below 4000 levels at 3985. Nifty made a high of 4303 and a low of 3970. The low of Last week was 3799. Sensex closed at 13102 after making a low of 13054. In Nifty and Sensex 4000 & 13000 respectively, seems to be a good support. If we take a Fibonacci Theory in the Nifty, from the high of 5298 and the low of 4369, the -61.8% retracement levels comes at 3790, which is the low made on 16/7/09 and low of 3799 made on 18/9/08. Volumes were very less in the last week.

==>> Volatile session with very low rollovers

The markets have rebounded with small rally in today's session after sharp fall see on Tuesday. The Sensex rose 122 points or 0.9% to close at 13692. Nifty closed at 4161 up 35 points or 0.8%. In the F&O segment roll over were low, Nifty rollover was at 43.2% versus 56% and market wide rollover at 50.4%. Fresh long built is seen in the metal counters.

Global concerns are not yet over even after bailout package announced. There are news that bailout package might be limited and may take longer than expected time to pass. FBI is likely to probe Fannie, Freddie, AIG, Lehman Brothers for possible accounting misstatements. Henry Paulson, the US Treasury Secretary, and Ben Bernanke, the Chairman of the Federal Reserve will be appearing before the House Financial Services Committee.

Indian markets opened on the weeker note, plunged down nearly 250 points in Sensex but recovered sharly to almost flat, but again in the closing session closed below nearly 400 points. Nifty closed -97 points at 4126 and Sensex closed 425 points down at 13570.

==>>US markets loosing its charm

Goldman Sachs and Morgan - the two great names in the financial sector are converting themselves into the old fashioned retail commercial banks. Morgan is wooing Japanese financial powerhouse Mitsubishi UFJ Financial Group Inc with a 20% stake that would garner $8bn. Nomura again from Japan have announced that they are buying the Asia operataions of Lehman with around 3000 staffs also. The euphoria over the Fed bail out appears to be loosing its shine. US markets closed around 3.5% down.

==>> Can we breakout this time above 4650???

It had been a very volatile week for the traders, Asian markets mostly depended on the American markets. American govt banned short trades on some financial sector, that lead to great short covering in the US makets. On thursday Dow and Nasdaq closed up around 4-5%. On Friday S&P500 hit the upper circuit of 5%. This could have definately given some sign of relief to the traders who rushed to cover their shorts. On Friday Russian market zoomed up around 11-12% on back of Russian govt will pump $20bn to support the stock markets. Thanks to the US markets that led to some relief in the other global markets also.

In the last few blogs i have mentioned that the Indian markets should out perform the other global markets. On 15th Sep Nifty closed at 4072. US markets were terriebly down, Asian markets were also feeling the tremour of the US markets. Next day Nifty immediately opening plunged till 3919 down around 160 points, but in the close session both Nifty and Sensex recovered smartly and rallied up to close above the previous close. 4070 levels was the 61.8% retracement level from the low of 3790 made on 16th July and high of 4539 made on 24th July. On Tuesday and Wednesday Nifty faced the resistance on the same level. On Thrusday Nifty opened in the Negative zone made a low of 3799 and closed above at 4038 to make a "Hammer" pattern in the Daily chart. The volumes were also good in the last 2 days.

Expect some short covering in our markets also. This may lead to 4400 levels in Nifty. We may see some side ways movement also and some profit booking also. Nifty will again try to test the previous highs. FII's remained Net seller for the week. They sold nearly Rs. 4600 Crs worth of stocks in the last week. But the DII remained net buyers of stocks worth Rs. 1700 Crs.

Today Sensex negative with a gap of around 550 points, and Nifty just after opening plunged to make a low of 3799.55. As we have seen in the past also that the Nifty has a good support at 3800 levels. In the closing bell Sensex recoverd nearly 750 points and Nifty nearly 170 points to close above in green zone. Yesterday also i todl that the Nifty chart is showing a hammer patterna and some pull back is definately expected. in my last blog i have also mentioned that the Indain markets should out perform the US markets and today we have seen that.

Morgan Stanley scouting for the buyers in China and possible merger with Wachovia the fourth largest US commercial bank. Moragan Liquidation of Indain Eq continued for the 2nd day in a row. it sold stocks worth Rs. 1279 Crs. The state owned Chinese fund could buy as much as 49% of MS. CIC bought a 9.9% stake in Dec. The US Fed, ECB and the Bank of Japan came together to create a massive $247 bn kitty. Russis promised to pump $20 bn to support stocks and promised a cut in the oil tax, while China decided to scrap the Stamp duty on stock purchase.

==>> Morgan Stanley the next tgt, will Goldman Sachs also???

Finally AIG got a bridge loan from the US govt of $85 billion in exchange of 79.9% stake in the giant insurer and of the most admired companies. Barclays said that it would acuire Lehmans North American investment banking and capital markets businesss for $250 million in cash. Morgan is in talks with China's CITIC. Morgan Stanley has sold in India-big time. Is it a sigh of another collapse??? On wednesday MS Mauritius Co. arm sold around Rs.870 Cr in some blok deals. Block deals inculde United spirits, Pantaloon Retail, Educomp Soln, jindal Saw, Gujnre coke, Opto Circuits, Subhasd Projects. Morgan Stanley stocks tumbled down around 44% and Goldman Sachs 23%. Dow is 4% down and Nasdaq pluged 4.9%.

There were rumors of ICICI Banks top official offlodding their hodlings in fear of big losses in the balance Sheet, that lead to 11% fall in the stock prices. The clarification was given by the Top officials in the market hours. Nifty closed at 4008 after opening at 4074. Nifty made a high of 4116, but could not sustain for a longer period. Nifty could plung down till 3650 in extreme case.

==>>US markets trembles

BOA bought Merrill Lynch for $50bn. Lehman filled for bankruptcy. AIG may go either way on Monday, it was denying buyout offers & instead, seeking a $bn cash infusion. The take over of the Merrill leaves two large independent investment banks in America, i.e Morgan Stanley and Goldman Sachs. According to me both will also come with more losses in their Balance Sheet. Accoridng to the Bond traders, "Morgan" could be the next target. (If this happens then the America is heading towards a Great Depression as seen in 1929.) In the last 1 week there has been 3-4 bad news rulling the American markets. Just after then news of Frannie & Freddie taken over by US govt, Lehman collapsed and now Merrill lynch. I think so there could be more bad news just waiting to blast like a volcano.

Nymex crude plunged to $90. Rupee has further shown weakness against dollar. Rupee nearing 47 agianst 1 dollar.For Rupee depreciating the blame could be on the illegal overseas NDF( non-deliverable forward markets. Its illegal coz they are not sanctioned by the RBI. A NDF is a non -deliverable forward contracts in which buys forward dollars (book dollars today for deliver at a specified future date) in the local market for their clients and sell equivalent dollars abroad or viceversa, so that on the delivery date they make a profit or loss, which is the difference between both the rates.

Yesterday Nifty closed at 61% retracement level from the low of 3790 and high of 4620. Today markets opened with a downward gap. but in the closing bell both Sensex & Nifty bounced back. Nifty recovered around 150-160 points and Sensex around 500 points. Technically speaking Nifty daily price chart has some indicators that shows that we might see some bounce back form the current levels. "Hammer" pattern is been made in the both teh Sensex and Nifty chart. In the last 2 days there has been a gap down in the Sensex. it may bounce back to fill up these gaps.

In the last few blogs i have been informing the readers of this blog that the Banking & real estate sectors will the be the worst sector to perform if the market comes down. America could see recesssion. Till now the all the global markets have been following the US markets, but according to me now the emerging markets could see some divergance and could outperform US markets. In the near term i dont see a fast recovery but surely the Indian markets will outperform US markets. Nifty has a good support at 4000 - 3950 levels.

We will see a gap down in the markets today. The Nifty close below 4200, the fall may continue will 4000 levels in the coming days. Rupee is trading at 45.87 as compared to Dollar. Crude plunged below 100$ per barrel, but that will not help much. Traders are adviced not to take any positions.

==>> Nifty again at 4250-4200 levels, good support

Indian markets lost around 1.5%- 2% on Rupee's Weakness and Nervous Global markets. In the Morning SGX Nifty was trading at -80 points. Nifty opened n the negative zone, took a downward movement. Nifty closed below at 4288, after making a low of 4272. It closed just above the 50MDA which was at 4284 levels. In the chart we may see that the nifty closed below the 2nd trendline also. Sensex lost 338 points. Nifty always found good support at4250-4000 levels. We might see some pull back.

Inflation dipped for the third week. Inflation for the week ended lower at 12.10%. Rupee touched a new low of 45.50. gold is also making a new low. When the Crude is nearning a 4 month low at 101$, OPEC countries have decided to cut down the output of the crude so that the price remains above 100$.

Yesterday Nifty opened below the trendline, took support at 20DMA 4392. Nifty closed below at 4400.25. Sensex cloed below at 14662 after making a low of 14609. The MACD is still showing the positive sign. Yesterday our markets plunged down on the back of international markets. Nifty major support at 4200 and resistance at 4550.

==>> Some major points to be seen

We have seen a very volatile trading session yesterday. Nifty after opening made a low of 4418. Sensex made a low of 14714. In the last few hours Indices rallied to trade in the positive zone for sometime and closed below marginally in the negative zone. Nifty and Sensex closed at 4468/14900 respectively.

In the chart there we can clearly see that the Nifty closed above the Trendline line ( point no.1). Nifty on 9th Sep faced resistance at the 100 DMA (point 2.) and closed at 4482, before making a high of 4558. Point 3 indicates where the RSI normally finds the resitance. On 2nd Sep, even though there was a great rally in the Indian market, RSI could not close above the point3. Point 4 indicates the resistance level of the RSI. Point5 indicates the MACD has just crossed over and its a Bullish sign, till the time it is closing below.

There are 2 major levels to be seen, at the higher level, Nifty should close above 4550 and at the lower levels it should not close below 4200, for the Bullish Signal to remain in touch. Nifty below 4200 will make a head and shouled pattern. To break this pattern the Nifty should close above 4550 levels.

US markets are trading at - 2% lower. Crude trading near 104$ per barrel, gold near 800$.