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