Thursday, August 25, 2011

#81 Nifty Update

GOLMAAL 4 has been released but this time director is not Rohit Shetty but its SEBI and FII and star cast is BSE and NIFTY. Indian market are trading opposite to global trend. All the global markets are recovering their losses which they made since 20th July but we are deepening our losses. NIFTY opened positive but then showed some downside to close 49 points down to 4839. Now people in US and Europe are confident enough of their stock markets. This could be noticed because since last 2 trading session equity markets have rallied 5% while gold have lost $200 from its life time high on tuesday. Gold has seen heavy profit booking in physical market as well as trading platform. COMEX has increased gold margins to around 27% which is one of the reason of correction in gold prices. Crude price is expected to have a stability as Libya problem is solved and its expected to produce 300000 barrels /day by this year end. Banking stocks have seen a downfall in US but durable goods market has seen boost in demand which has brought back confidence amongst investors and they are re-positioning themselves in stock markets. NIFTY had its expiry today and it was expected that it will have a short covering with the support of global cues but NIFTY is odd one out and it declined. Coal India had received environmental ban at its 22 mines in Jharkhand yesterday but they claim they havent received any letter till date and have continued their production at the mines. One of the burning issue in indian corporate world right now is banking license. PFC and REC is also planning to enter banking sector. Analyst have raised the question that can this 2 or companies like SREI are eligible for license? All this small companies are not even performing their existing business properly. Coming to IDR's...(indian depository receipts) They have not been able to attract foreign corporates because there doesnt exist two way fungiblity option. Only Standard Chartered had issued IDR last year but that too is trading 42% down from Issue price. SEBI and IRDA are planning to revise norms to attract more foreign entities. On other hand Foreign loans are getting cheaper for indian corporates but due to shortage of dollars in market it has been difficult at present to raise foreign funds. One more interesting news were about DCHL (deccan chronicle) who completed buyback of shares yesterday and it was biggest ever in Indian Stock market history. Technically speaking all the NIFTY indicators are hovering just above oversold zone. I am feeling that market is consolidating at current levels. No major pattern has been seen in recent sessions. I still feel that gap at 5300 will be soon filled so i stick to my strategy of holding NIFTY with SL of 4780.
NIFTY levels for 26th August:-
R-4862                  S-4810
R-4890                  S-4770
R-4935                  S-4750
R-4976                  S-4700

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