Nifty has still been trading in the
downside channel. In last month issue I did mention that the market was in
crucial range between 5855-6118 and could go either. Unfortunately it was on
the downside. India was under-performing its western peers. Last month was full
for global events which had some profit booking effects on all equity markets. But
all the events have some long term good sign of economic recovery. Fed
announced that it may stop easing money inflow to the markets as they believe a
recovery in US economy is back on track. Consumer confidence number, retail
sales number and Home sales number have been increasing significantly in the US
while somewhat similar trend has been witnessed in Europe. But Asia was little hazy last month with their
economy and money market. Japan’s Nikkie was on lower circuits for couple of
days as yen got stronger while Shanghai compositie also saw more than 5% cut
for 2 days as People bank of China plan to squeeze liquidity in markets by
making loan approval a stricter way. Overnight money market rates in China had
shoot up to 6% when PBOC stated about squeezing liquidity. But overall US and
Europe are sighting some recovery in the economy but yet not completely out of
recession.
Coming to our market, most talked
about last month was USD/INR. Our currency was at the life time low to around
61. No one could have even imagined that we could get to this low in just few
months. On my blog http://Chartechnician.blogspot.com
I had posted on 30th October 2012 that we might see Rupee at 62.80
but most of them laughed off but now we are not much far from that level. We
might now not see 62.80 ryt now as RBI
has stepped in to protect our economy. Gold import duty was hiked to restrict
gold imports and save CAD (Current Account Deficit) but I feel we can save it
easily by exporting more goods rather than restricting imports. Technically now
as seen in the chart below we May see Rupee strengthening with tgts 59/57.30/55.75-56.20
before making a new low at 62.80. YES!! STILL IN LONGER TIME TGT OF 62.80 ON
USD/INR IS INTACT.
Coming
to our precious yellow metal, Gold, it still in a downtrend. As I had intimated
on my blog on 29th Jan 2013 that we need to short gold with minimum
target of 25000 and we got that target. But looking at the monthly chart of the
gold we may see some more downside. In dollar terms we have already seen some
downside but in rupee term we may see downside in coming days for the reason I mentioned
above that I am expecting our rupee to be strong which could bring down gold
price. Last week Morgan Stanley has downgraded the gold targets to $1300 upto
2015. So now gold could not be a preferred investment asset with a medium term
view of 3-5 years. Our strategy would be to short gold on every rise with SL of Rs.
28000
Coming to Nifty technical, it is still in a secular bull
trend but we are experiencing some reaction within. But monthly chart is moving
exactly as per the standard Elliot wave pattern. Now we have a strong support
at 5678. 100EMA is 5844 and 200 EMA at 5757 which are crucial levels on nifty
nearby. You all should consider these
levels to add longs as we might see some downside upto 5678 but now take that
as the opportunity for long term investment. Strategy would be going long
on Nifty at CMP and add longs on downside at 5757 and with strict SL of 5632
Note: All the data and
graph is as of 28 June 2013 closing
Disclaimer: I may have
personal position in index and above mentioned stocks. Views and News mentioned
above may have Errors and omissions. My views are biased more towards technical
analysis. Please read and study the market carefully before investing on my
idea. For any suggestion contact me on my email. Some words mentioned in
article don’t mean their actual meaning. They are correlated for market.
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