The technical levels indicated in yesterday's posting seem to be offering some support as indices entered oversold zone, with huge two way volatility, indices have finally closed with small gains, as the global markets too supported such move. RBI has cut Repo rate by 100 basis points, inducting further liquidity in to banking system, ending rate hike for now, and the banks should now pass the benefit to borrowers reducing the lending rates, as CRR also is brought down by 250 basis points from its peak level of 9% during the last one month.PM's statement in Parliament 'suo motto' confirming and assuring the house and people of our country that all bank deposits with Public and Private banks are safe, should calm the nerves of investors and depositors, after seeing series of large banks and financial institutions failure abroad in recent times. The inflation also has cooled off to 11.44% as reported last week, Crude has corrected more than 50% from its all time peak of 147$ suggests that the excesses of the commodity and equity markets are adjusted to maximum extent. US markets have closed with gains over night and asian markets trading positive territory.
5DSMA of Nifty is currently placed at 3264.70 will be the first hurdle to be conquered by bulls and it should close above that level on weekly basis, initially, for confirming some base formation. RBI's stance in the ensuing Credit policy meeting on 24th is already indicated with Repo rate cut yesterday, that liquidity management, without hurting growth of the economy shall be the main azenda. 28.10.2008(Diwali...Lakshmi Puja) an important festival for most of the business people especially entire North India, where the new accounts are started, and equity markets too in our country give importance to 'muhurath trading' should give some smiles to the investors and broking community finally, as this year has been torchure for all class of investors and traders so far not only Indldia but also in all markets. It should not be construed that the bear market is over and bull markets have begun where every one makes easy money!
Systematic investment periodically, or professional trading with strict discipline shall always give returns in the long as well as short term, irrespective of whether we are into bull market or bear market! Following professional advise, along with self analysis and taking informed decisions on investing in stocks and exiting the same, based on one's own risk perception, always benefits anyone. Buying stocks on gossips, romours, on suggestion from persons who have neither fundamental nor technical knowledge can be disastrous, and indian investor is hurt number of times viz., 1992, 2000 and in 2008, that is the reason why, percentage of households investing in stock markets is the lowest in world even today. Singapore Nifty futures are currently quoting at a premium of 49 points should give positive opening initially for our markets today. The put call ratio of Nifty has touched a low of 0.71 indicates huge shorts in the system, and this level was the bottom of this index on number of occasions, where markets have formed short to medium term bottoms. Thus, derivatives settlement next week, it is to be seen whether some short covering rally will push the indices up in the days.
Range for the Day: Nifty might trade in the range of 3100 to 3250 today.
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