At the outset let me inform all viewers that I was away for the past one week on some important project work, due to which could not post daily views. The week passed was historic, all global indices touching new lows in 2008, rupee's breaching 49 level, due to heavy rush for dollars as FIIs continued to press sales from Indian markets. RBI has cut CRR by 150 points in total during the week to ease the liquidty. Crude crashed below 80$ is a good news for our economy, but the advantage is offset by weakening rupee, thus, the strain on Balance of Payments stands as it is. The Infosys disappointing performance for the last quarter and lowering of dollar guidance for 2009, naturally sent shock waves, confirming global slowdown, amongst investors. The valuations look quite mouth watering, but in deep and prolonged bear market, valuations does not attract any investment, until some stability on macro picture emerges.
CBOE index has shot up to 70 an all time high, suggesting more weakness and volatility for US markets, which had free fall last week, surprising all technical analysts. Fed action to reduce the rates by 50 basis points to 1.5% did not help to bring any calmness, as the financial mess in US is spreading now to European economies, since some skeletons are coming out of cup boards.
VIX closed at 44.70 on friday. Asian markets are trading in positive territory in positive territory, Singapore Nifty futures are at a premium of 115 points currently, might give positive opening for our markets today. Last week I have written that the Nifty has shifted to 3500 to 4000 band, after so many months, and expected it to hold 3600 hold on any weakness. However, once 3700 to 3800 band is broken which offered support more than 4 times, hell was loose on Nifty, which made a new low of 3198.95 on friday(11.10.2008) which almost completes 50% retracement from the all time high of 2008 made at 6357.10.
Consolidation cum base building should happen which gives prolonged sideways movement for the markets, with a long term bias clearly being down, sell on rallies always gives an opportunity pick up the same stocks at much lower levels, as this bear phase is not going to wither away at least before one year from now. It is to be seen whether Nifty will bounce back above 3500 during this week or settles in the next lower band of 3000 to 3500, as results from other sectors and companies start trickling in slowly.
Range for the Week: Nifty might trade in the range of 3000 to 3500
No comments:
Post a Comment