World sneezes, US catches cold

Its a reversal of all sorts and US markets gapped down on global cues and then consumer confidence numbers hit the street with a bang pushing the indices
down. As mentioned in our earlier analysis this S&P might not be able to save the support levels. We see the next support for S&P at around 950-960 levels which is another 10 pct downside from current levels.

Indian markets cannot just move up when the world is crippled with issues. We are not expecting any rally this month. Infact a break below 5200 might make the Nifty test 5000 levels and then 4800 (a little tough to get here).

Midcaps are ruling the roast and it is better to stick with the quality names in the space or might be playing a waiting game is a good idea. Agri theme is building up on D-Street and ohhh, Boy watch Insecticides India. This stock gained nearly 500 percent in the last one year that too with volumes. Goldman sachs entered the stock around Rs 180 levels for its clients. United Phosphorous is one another stock we are bullish on. Aries agro is another stock to watch out for but the volumes are pretty low.

Power, Textile Retail, Agri based (not bullish on agri commdities though) are the sectors to watch out for in the next one year. It is undoubtedly one of the most uncertain period with excellent gains in the last 14 months or so but Indian markets are poised to outperform the globe and most likely to decouple the rest of the world but definitely not this month with another negative news in the form of rate hike looming.

Powering up !!

Power stocks ruled the roast on D-Street yesterday while Oil companies continued to boost indices. US Economic data is still a dampener while
India seems to neglect the negatives.

We like the power space from the next 2 year perspective. With lot of reforms and many plants ready to commence operations Power stocks are ready to
move up big time. Reliance Power, Adani Power, India Bulls Power and Govt owned NHPC and NTPC are likely gainers in this space. We like one BSE listed
power stock and betting 400-500 pct gains in the next 3 years.

We like textile sector especially the retail space. Arvind is our dark horse here while Brandhouse started looking little expensive. Autos, Banks had their
share of the last one year rally along with IT. Consumer durables like Whirlpool moved up big time. Followers of India Bears might remember 3 years before
we recommended Whirlpool at around Rs 50 levels. Time for the next of rally but from a different space. Realty might still lag for the next 6 months or so.

Midcap space is getting hotter. We sincerely advice to check the company credentials before jumping the gun

Global uncertainities to weigh on Indian markets

Uncertainity is still the biggest hangover for Indian equities in the near term. US Economic data starting trending downwards thanks to end of tax benefits for housing sector, which drives major part of the US Economy.

Chinese currency de-pegging rally faded early in the week and US Markets are on the verge of break down again. Having vividly followed US Markets over 2 years S&P has put up a strong support level at 1040 and this time the raid would make it attempt number 4 for bears and in all means it will break the support level this time.

We expect the bad news to continue on the economic front in the US in the short tmer.

Oil price de-regulation is a big booster for oil marketing companies especially HPCL, BPCL and other oil marketing companies. Quoting a leading financial daily's article on KP regarding accumulation of HPCL shares way before the news adds strength to their version.

Sky is the limit for oil companies and watch out for IOC, Oil India, ONGC and Essar Oil in this space.

Coming to Inflation weekend price hike will add one notch to the Inflation and this would certainly Mr.Subba Roa on his toes with reference to interest rate hike.
While Mr.Singh's comments at G-20 doesn't suggest a rate hike, Mr. Subba Rao is keen to raise rates and is said to be pressurized by the government to hang on for some more time.

Mumbai realty companies should show strength, given the exhuberant land prices but the overall realty scenario is holding off the stocks. Oil deregulation is a big negative for Autos, Banks and Realty in the descending order.

While operators appear to be back on track with small caps moving, one should get into quality names to ride the next rally. We expect the next leg of rally to start in August and might span for few years with minor breaks.

Fasten your seat belts and get ready for the take off !!!!

Europe jitters pull down global equities

European jitters re-appeared again much to the dismay of investors. Stocks across the globe started the slide again. Indian markets are poised for a rally but given the global conditions markets postpone the same.

Domestic consumption can be considered as one of the key drivers of Indian economic growth. Midcap stocks are outperforming the indices and we expect the same to continue for some more time.

Realty should be avoided for the time being. Infra stocks like Nagarjuna Constructions are trading in a new band and so are stocks like United Phosporous and Bombay Rayon Fashions. But the actual momentum is lacking in the market despite of midcap winners.

We believe Euro issues might keep the liquidity at bay atleast for the short term. It is time to slowly build a portfolio for a longer term

Consolidation before the next run

US Markets closed flat after a volatile session yesterday. New home sales dropped 32.7 percent from a month earlier to 300,000 in May, raising the prospect of an economic recovery slowdown. We expect the economic data to take a toll on the US Markets.

Indian markets are exhibiting excellent strength when compared with its global peers. We see a decoupling sooner but we expect another phase of consolidation. Midcaps along with small caps are looking to run again.

We are bullish on Power and Textiles in the next 2 year period especially power sector is ready to go miles as many plants are in the commisioning phase.
The rupee strengthened on optimism fund inflows would increase as overseas investors step up purchases of the nation’s assets to benefit from India’s economic growth.

We expected the mamouth rally to start in August. But it appears Indian markets might take off a little early. Stay invested and add on downsides.

Gloom re-appears

Wolrd markets followed the US markets today after poor home sales data hit the market resulting in what can be called a trend changer. We clearly mentioned yesterday that this time S&P might break the so called support level at 1045. At the same time we do not expect markets to tank like they did in May. The pain will be slow and steady. US Economic daa will be keenly watched.

Indian markets are displaying immense strength but the current rally might fizzle out as they ran into major resistances. Small and midcap stocks continued their upward journey.

We are expecting a dull month going forward with a negative bias. Stay invested but save some cash for a rainy day. There might be thunderstorms ready to hit the markets soon

Yuan rally fades....

Chinese currency story faded yesterday after Wall Street closed in the red. Asian markets witnessed a stunning rally courtesy Yuan de-pegging news.

China lowered its U.S. dollar central parity rate to 6.7980 yuan on Tuesday from 6.8275 yuan the previous day after allowing the local currency to sharply appreciate in the spot market on Monday. The news sparked a quick pull back in global equities from the lows of the day. But we still believe the rally has little room top move up.

Current situation can be best termed as lower upside chances and more of a downside though markets are behaving the other way. The bullish sentiment being injected will fade sooner than later.

Indian equities might decouple from global scenario given the situation. More and more inflows are expected as ULIP news will add fuel to the fire.

Stay invested and add on declines. We still do not buy the theory of bull run in the short term in the current scenario

Yuan de-pegging likely to trigger bull run, F&O expiry to keep a check

China's loosening stance on the yuan is likely to boost currency values across Asia while relieving upward pressure on Asian interest rates. China's stock and bond markets will likely rally in reaction to Beijing's pledge Saturday to increase the currency's flexibility after nearly two years of keeping it pegged against the dollar.

Indian Rupee too will appreciate as a follow up to the above mentioned positive news. F&O expiry might keep a check on the Nifty upmove. Euro concerns seems to have disappeared atleast for now. It is amazing how the S&P tested the support level third time and bounced back. One should keep in mind if there is any downturn in the US market this week it would signal a death blow again for bulls. We are catiously optimistic after being bearish for the last 2-3 months. Indian markets are denying any raids by the bears courtesy the strength of the economy.

Interest rate hike is inevitable and avoid rate sensitive sectors like Auto, Realty for the short term. Concentrate on small caps and midcaps for now as large cap valuations are inline for the short term. Expect Nifty to trade in the band of 5200-5300 for the expiry week unless another leg of downturn unveils.

Nifty levels

Intraday views for 18/06/10
NIFTY INTRADAY RES....5290....5320....5355....5​380.....5410

SUPPORTS....5265....5250...5230.​..5200...5170...5140

ALL THE BEST

BUY JET AIRWAYS IN CASH AROUND 515 SL 505 TGT 524-532

Markets likely to cool off

After a rapid climb over the last 10 days, equity markets across the globe are likely to cool off. Despite of negative home sales numbers the impact was minimal on Wall Street.

Rate hike checked the market rally in Indian markets yesterday. Nifty is trying to consolidate before the next move. While many predict an upmove we still believe the current rally as a head fake rally extended from oversold levels. The current pull back rally has very limited chances of getting converted into a full blown rally.

RBI might surprise the market with a rate hike this week end or some time in the next week. Inflation will keep the government on the edge.

Junk stocks are moving up again. Do not fall prey to operator games

Bullish Momentum to continue...

Weak US Inflation data stoked a rally in the US Markets yesterday and is likely to propel a rally in Asian marktes today including India.D-Street is likely to open up continuing the last 5 day winning streak today. Midcaps continued to spring in major surprise with ADAG stocks jumping all over the place with RNRL leading from the front, taking over the baton from Reliance Communications.Our bearish view on Nifty has taken a beating but we are still not comfortable given the current economic situation. Inflation is a major concern while Euro crisis is not over yet according to us.

We would wait for 5250 for Nifty on a closing basis before taking a bullish stance. Things are definitely uncertain still though many brokerage houses changed their stance suddenly. Keep a catious view on the market but as we always said a long term investor can continue to hold and add on any declines.

Nifty 5300 is what most of the analysts are pegging the resistance. Better safe than sorry.

Bulls look tired after a decent start to the week

Stocks on Dalal Street might look to consolidate after a good start to the week on Monday. We expect the benchmark index or the Sensex to give up 50 to 100 points today. The immediate support for Nifty is at 5180 and a breach would revive the downward trend in the near term.

U.S. stocks ended lower Monday, with the Dow industrials giving up a more than 120-point advance, after another downgrade of Greece's sovereign ratings offset hopes of recovery in Europe. The Dowjones Industrial average ended down by 0.2 percent after nearly gaining one percent during the day.

IT and metal sectors were in the limelight yesterday gaining nearly 2 percent for the day. Infosys was surprise gainer yesterday as the scrip gained more than 4 percent on FII buying in the counter. WIPRO, HCL Tech and Reliance Communications were other notable gainers in the Nifty Fifty stocks.

Meanwhile the Core Inflation numbers came in above analyst estimates came in above at 10.16% above the analyst expectations. The markets kind of ignored the bad news yesteday, but we believe that this would increase the pressure on RBI, which eventually could lead to rate hike by the RBI in late July. This might not bode well for the markets in the short run.

Balaji Telefilms and RNRL were among the top gainers in the midcap stocks space yesterday, with later witnessing huge volumes as was the case with most of the stocks with exposure to ADAG. Overall, a flat day with a downward bias is in the offing.

Head fake rally on cards

Suddenly things turned in favour of bulls. Atleast the press and US markets are trying to portray a brighter picture. Over the week end couple of regulators tried to pump bullish strength. Here are a few

1. Euro crisis may trigger more capital flows into India: RBI

Our Take : While there is absolutely no doubt that Indian market will lead the rally from the front, when the world is burning it is pre-mature to talk about inflows and that too when last month's data clearly show outflows from FIIs due to a strong dollar. Dollar strength is a major concern for emerging economies atleast in the short term when it comes to inflows.

2. Markets exaggerating euro zone risks: ECB policymakers

Our Take : That is a funny statement indeed. We believe markets are correct given the underlying macro and micro economic issues in many small European nations. Euro is likely to get even with US Dollar if the crisis continues. Watch out for unwinding of major economic issues in the EU soon.

Bottomline is when the world is burning no one will dare invest in equities. Coming to Indian economic picture Industrial numbers were stunning but bears have a cause here. RBI might raise rates before the july meet itself.

Infact RBI is in a catch-22 situation whether to raise rates or hold on and watch how the Euro crisis plays. While the first action will slow down growth, the second one will trigger massive inflation. Let us see how Mr.Subba Rao handles the situation,

We still believe 4750 will be tested on Nifty before any upmove. On the flip side we will go long with Nifty above 5250 levels

China & Euro boosts global equties

It is one of those massive squeeze rallies happening around the global equity markets. It started with Chinese exports jumping big time sidelining European woes and positive comments by Trichet (ECB cheif) on Euro boosted sentiments giving a thumbs up to bulls.

Nifty too is looking solid at current levels and is expected to see another 1 pct easily from the current levels. While many of our subscribers and visitors to this site are eager to find out whether this is the end of the correction which started in the first week of May. We stick to our earlier view and it is pre-mature to be upbeat on the current upmove.

Traders who buy on dips and short on the upmoves might have done well in the last fortnight. But we are in for a one side move soon and we still vote for a big down side else where. Indian economy will get a shot in the arm this year from most likely normal monsoon. Fertilizer related stocks continued to move up with United Phosphorous and Insecticides India moving up handsomely.

Midcaps are back and so are speculators. Watch out for stocks like Gitanjali Gems, IFCI, BRFL, Nagarjuna Constructions which are looking excellent on charts. Things are suddenly looking upbeat. Don't get pulled into the rally. Patience pays big time and take a break from markets if you are a small investor

Asian markets decoupling ???

While US markets tanked from highs of the day to the lows of the day in a matter of 30 mins, Asian markets appear to be not too much concerned about Euro crisis for now. FTSE future are down 1.5 pct while Wall Street closed down with Dow losing 40 points after moving up 125 points at one time.

US Market appears to be on the verge of a major break down. S&P below 1045 which is a 10 point downside move from current levels will move to 980 and then 950 levels. Bernanke in his testimony did sound upbeat but the confidence is lacking and market figured it out.

Volatility is at its best during the later part of the day. Nifty got into the habit getting smacked from the highs of the day. It is better to go on a vacation from the markets instead of jumping the gun.

Midcaps showed good interest yesterday with MNC stocks like KPIT Cummins, Abbot India spiking up. Aviation stocks are doing rounds among broking circles especially after Goldie converted warrants in Spice Jet, taking its stake to 6 pct in the company. We believe the stock is a multibagger in the making in the next 3-4 years

Nifty looking weak

US Markets bounced off the support levels but it appears to be a fake bounce. We expect the support to be broken in the next 2-3 days with ease. Relentless selling is clearly witnessed on wall street from the last one month.

Indian markets are trying to exhibit brave face to the current crisis and afternoon session showed the vulnerabiolity of Indian market. We do not need to mention the volatility happenning from May. Traders have to time the market and it is almost impossible to track the trend on a daily basis. Small Investors would do well to stay away from the market. Though we hate to comment on other analysts one should be catious in listening to analysts who are trying to pump bullish blood.

Indian economy is undoubtedly the hottest economy on the planet and will continue to be so for the next 5 years but for the time being global sell off will have a ripple effect on Indian bourses. While the outcome of the current crisis is unknown, weak US economic data might halt the bull run for some more time. We are looking of period of consolidation after this leg of correction before a major take off.

Nifty is certainly looking weak and it is a matter of time it enters 4800 zone to test the resistance at 4800 levels. We are afraid 4800 might be tough to hold but 4650 is a bigger support level this time which is nearly a 7 pct fall from current levels

Wall Street continues to slide, D-Street vulnerable

US Markets continued to slide, with S&P closing at a 7 month low. Another 1 pct loss in S&P might trigger a massive sell off technically. Asian markets plunged yesterday following US Markets on friday.

Dalal Street closed better than most of the global markets yesterday and rightly so. One major concern about Indian markets is they are extremely vulnerable to FII selling and one massive unwinding by one fund might create panic in the Indices. For now we do not see any such indications.

Realty and Metals continued to sell of and it is a good idea to stay away from these two sectors. Cabinet board failed to take decision on crude price hike. Inflation will be a major concern if the government says OK to the hike as crude oil forms a major part of our Inflation index.

Reliance Communications continued to swing upwards on the stake sale news. While US based telecom giant AT&T denied reports of the company picking stake in Reliance Communications, it is not going to be that easy to get a buyer for a better price. Telecom will underperform the Indices for the next 2 years. 3G is another pain for telcos which will hit the bottomlines.

Euro continues to slide and this is definitely a cause of concern for US companies that depend on export. Indian Rupee is on a downtrend too, tracking domestic equities and rightly so. We expect USD to hit a longer term top between Rs 48-49

It is a stormy day !!!! And yes it is a black Monday

Hungary debt, US jobs data and the bad news flow continues like a Tsunami. While we are not sure how many visitors to this website recollect our analysis. "The current Euro crisis will be followed by weak US economic data".

Things will only get worse. Do not believe or trust any positive blabberings about global ecnomy. Indian economy will slide too along with the global markets but impact is pretty minimal. It is more of a sentiment than real impact. We are pegging Nifty targets at 4600 in the next 2 months which is a 10 pct slide from the current levels.

Global markets are trading extremely weak today and can be termed as a black Monday with every index losing more than 3 pct while D-Street might not have anything to offer except to tamely go down.

We track US S&P for global market direction as currently global factors outweight local issues and every major market in the world tries to mimic the Big brother (US). S&P is on the verge of a major break down soon. 1045 is the final support and yes that is the final support. Take a note of the number. Below that we see a 10 pct dip in the indices in the US. Are we kidding ?? Nope we are absolutely confident of another 10 pct slide in the US markets if we crack the support levels.

The current wash out will clean up the system and here is another stunning number. We expect Sensex to touch 35,000 levels by 2014 december. One might be wondering that we are not done with the correction and we are talking about the bull run. But the current correction can be termed as a final oppurtunity to enter the Indian equity markets. But you still have time till July/August to do the same. One should accumulate on dips instead of trying to time the bottom.

Bears down but not out !!!!!

Bears are definitely down after making a fortune last month. But we do not rule out a possibility of a massive come back. Reports of Hungary's (Euro Zone) debt situation might keep them active. US Markets are trying to consolidate the gains made on wednesday. Asian markets too moved up big time on thursday. One should keep in mind that the markets are not in a better shape to run from here.

D-Street broke the 5100 jynx yesterday but it is too early to say that we are up for another bull run. Reliance Communication is on a roll on reports of a stake sale. The stock has gained nearly 15 pct in the last 2 days.

Retail investors will be good if they stay away from the current fight between the bulls and bears and watch one of them emerge victorous. Getting into markets at current levels will be suicidal. Paying a stock 5-10 pct more than current price is worth instead of buying during the current situation.

Cement May dispatches were good. There is some interest being shown in stocks like IVRCL, Nagarjuna Constructions and Lanco Infratech. Stay away from realty pack.

Also sources indicate Mr. Subbaroa might surprise with another round of rate hike before the stipulated time

Indian equities to recover

Wall Street jumped on better than expected pending home sales data on wednesday. Asian markets greeted wall street's upmove with a positive start thursday morning. D-Street is no exception with a gap up start expected.

We still question the current uncertainity and stick to our earlier view of sticking to sidelines. Nifty will look good only above 5100 levels. One should be extremely catious below that level.

While there were many stunning numbers from corporates this quarter, Suzlon and Punj Lloyd disappointed. One should be careful in picking stocks that have longivity and fundamental strength.

Shree Renuka Sugars has managed to salvage its billion-dollar acquisition of closely held Equipav SA Acucar e Alcool, the sugar and alcohol assets of Brazil’s Equipav Group. As per business standard's report the company will now be getting the 51 per cent controlling interest by paying only $240 million or Rs 1,080 crore, 25 per cent less than its original bid, sources close to the development said. What’s more, say sources, it will not have to give its own corporate guarantee to Equipav’s lenders for the Brazilian company’s debt.

Indian inflation is another cause of concern and RBI governor Mr.Subba Rao is in a tight spot to raise rates again. For today it is time to ride the rally

Looking down the hill !!!!

Nifty tanked yesterday courtesy a freak trade in Reliance and thanks to the ongoing credit crisis happening in the Europe. US Markets after trading in a extremely volatile fashion ended the day in the red with a sharp sell off in the last half hour.

Asian markets have started looking like as if they have decoupled from the advanced markets, but one should remember liquidity concerns are not country specific. And thanks to the summer period, which traditionally is known for tight liquidity we might see Nifty tank to 4650. We were extremely bearish from the last 2 months and here we go with what we mean.

We advised our subscribers to buy Nifty last wednesday and thursday and again mentioned this week we will see a smashing run from the bear cartel. Coming to economy, GDP, Monsoons one will be wondering why the markets fall despite of excellent conditions prevailing. We cannot defy Mr.Market and markets try to get an insight into few issues far before any retail investor gets a clue about it. This happenned during sub-prime and likely to repeat now. But as many expect we do not see this crisis to impact India in a major way. Panic is yet to be seen in Indian equities..

We are waiting for panic to set in midcaps to add few multibaggers.