Monday, September 12, 2011

#91 Nifty Update

                        9/11 Twin tower crash anniversary was witnessed today. Friday and Monday were the victims for the crash almost 100 points each day. NIFTY closed again at a crucial level of 4946 keeping all the investors in a confused state again.

Today market was down on the back of global markets while more slide was given to our market by IIP data. IIP was expected to come around 6.1% on MoM vs 8.8% but  actual was out at just 3.3%. Last time capital good sector was the best performer and this tym too but in the descending order.Capital goods output was at -15% vs 36% last months. This lead to a deep jump in the capital good stocks today. Fundamentally also we should avoid capital goods stock as it has major exposure to foreign market after IT sector. SO avoid stocks like CG, BHEL, LT etc at CMP. This friday we have a review of RBI policy and many Bond analyst expects a rate hike while many other market analyst including me feel that there will be pause in the rate hike because number is saying all. IIP data its at lowest. If further rate hike is given then growth of the country may be hampered. And growth is equally important in line with inflation. So may be RBI will press pause button. But market has already discounted the hike news and so you may see high volatility this week in the stock market. So avoid intraday trading this week. Oil India Limited (OIL) is planning to acquire blocks in africa. This move is on the report that India import 80% of its energy need and will import around 90% by next fiscal. On another hand on friday August car sales figures were out and it declined by 10% by leading market dragged by Maruti on labour issue. They have currently stopped accept bookings for New Shit variant. If you are planning to buy a car then i would advice to wait as you may get discounts on high stocks and less demand which is the current scenario of automobile industry. A government took a major step in commodity sector where they increased the export limit for rice and wheat and we may see boost in overall exports. Our overall exports for august came with an increase of 44% while imports were up by 41% but on net side we had increase in exports. A KPMG survey said that if corruption can be removed from India then we can beat GDP of china in next 2 yrs..Its nice to hear but you know that corrpution free India is not easy to achieve in such short span. 

China Inflation has cooled down to some extent which is a slight relief for the markets there. Talking about the US crises now major event will be FOMC meet on 20/21 Sept. Alen Krueger, who is the chief Economist Adviser to Obama said in an interview with bloomberg that industrial output should be increase to encourage Job employement. He says Infrastructure expenses should be increased to increase over employment. Krueger report suggested that if the person has studied one grade more than his colleague then he got 16% increment in salary. Thus Obama should concentrate on improving education sector to increase the quality of employment to avoid off-shore of the IT business.

Technically market has given the close at crucial support of 4945 as i mentioned in my levels on friday. NIFTY is under the formation of downward sloping "inverted Head and Shoulder" pattern which if it gives breakout at neckline will be giving a vigorous reversal then the symmetric Head and Shoulder. MACD is almost flat but hasnt yet given a bearish crossover so market is at still on the edge. If market closed above 4927 for 2 more days then you may see some short covering .Today market opened gap down creating another gap at 4990-5060. So now we have two upward potential gaps which might be filled in near term .Strategy yet will be CAUTIOUS.

NIFTY levels for 13th September:-
R-4990                 S-4927
R-5017                  S-4882
R-5048                  S-4865
R-5082                  S-4800

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