ithinkaloud

Nifty Outlook

2012-02-05T11:23:00.001-08:00

As expected last week markets held 5100 levels with a profit booking session of 130 points on Monday.Nevertheless the market surprised on the upside with a break out above the 200dma 5200 level and smartly rallied for the week to end at 5325.85.Will markets extend the sur-price for the week too?The key Fibonacci level retracement of 161.8% from 4531 levels is at 5450 levels.Also in the medium term chart 5350-5400 on a closing basis continues to be key resistance ever since the correction from Aug 5,2011.The markets could make a triple top @5350-5400 levels and see some round of correction back to 5050-5100 levels before moving ahead further.With the overall sentiment being positively biased, markets should hold 5050-5100 levels in the near term.Any further sell off could be triggered by unprecedented global news flows.

NIfty Outlook for the week

2012-01-29T11:52:00.000-08:00

Having tested the key resistance of 5200 the index managed to close marginally above 5200.Market could see lack lustre movement for the week with upside capped at current levels.On Friday the index managed to test the 200 dma of 5218 and traded side ways for the rest of the day.Immediate support would be at 5100 and 5050 levels.With the index itself having rallied around 700 points the market would book profits for the week.With the earnings season coming to a close this week and lack of triggers in the domestic front, markets would consolidate for some time to come.Crucial support for the nifty would be around 4900-4950 any sell off below these levels could see a sharp rally on the downside.For traders strategy needs to move from index to stock specific trades.While it is advisable to buy puts at current levels one needs to have a watch on the time value as we are in a consolidation phase.The February series could spring a surprise with a tight range of 5050-5200.On the global side news flow from Iran and Europe could dictate the trend.

Nifty outlook

2012-01-19T23:06:00.000-08:00

The market seems to be inching upwards trading above the 5000 mark in 13 odd trading sessions for the first time. The rupee has been trading around the 50 mark gaining massively in a very short span of time adding to the cheer on dalal street. Reliance is considering a buy back and Food inflation is in the negative territory .On the Global front U.S economy is on the recovery mode and there has been muted responses from the Euro area. Is it time to change strategies on the Nifty and go Net long on the index does it make you feel there was never a better time to buy??. As a market player we all know there is always a day fro us in the market and there is never a beginning or end. The Nifty is currently trading above the 10,20, 50dma and is expected to face immediate resistances around the 5100 and 5200 mark. A immediate close above 5100 in the next 2 trading sessions could see and expiry around 5200 levels or at least testing of 5200 levels. However with markets being extremely overbought at current levels could mean a sell off at these levels to retest 4600. Buying of out of the money February puts as protection could prove sensible and keep lady luck smiling. Having stuck in a range for the last 6 odd months between 4600 and 5200 levels, this year could see the range being broken either ways. Sustained buying with improved investor sentiment can happen only above 5700 levels or around 3700 levels. Budget expectations on the domestic front could put an end to all the policy paralysis would set the stage for the year. The banking space could pull the index down in the next two quarters testing fresh lows with default being the buzz word. Nevertheless if not on January 24th some day the Central Bank will start cutting rates the economy will grow and Indian markets will outperform will make stock picking simpler and safer.

Key events before expiry :Reliance results-January 20,2012 ,RBI Meet-January 24,2012

Nifty outlook

2012-01-12T20:16:00.000-08:00

Having bottomed out at 4531 the market has smartly rallied to 4860 levels for the week. After a consolidation between the 4600 and 4800 finally the market has broken the 4800 levels. The current up move has held the key fibonacci levels of 4800,and the market could continue to move up to 4980 levels. With results around the corner and guidance expected to be tempered the market continues to be a sell on rise market. The current upmove would fizzle out at 4980 levels and the market could continue its next leg of downtrend testing 4600 levels again. While global economic outlook could continue to be depressed by the Euro outlook, On the domestic front triggers can be expected post UP elections and budget. The earnings season by and large would set the pace for the month and the index could continue to be stuck in the band of 4600-4900 in the near term. Any further sell off late in the quarter would be dictated by domestic events and earnings revisions. The IT pack continues to be weak post Infosys results with a poor guidance despite the rupee depreciating by 20%. Given the current trend a 20% downside from current levels looks obvious.

Market Views

2011-11-24T12:48:00.000-08:00

It has been yet another year for markets filled with volatility and unexpected continuous bouts of frustrating falls in global markets.The Nifty opened the year at its high of 6k following heavy selling through the months.Markets have made continuously lower tops and lower bottoms month on month on the charts,breaking every support slowly but steadily.Could 2011 be just the prelude for unveiling another cascading effect like the 2008 crisis or is it the last round of bears hammering a'int any debate.High interest rate regime,weak currency,ballooning fiscal deficits, slower growth,lack of political Governance have increased the country risk manifold times.Dwindling corporate profits, in such an uncertain regime and stagnating wages coupled with high inflation seems to be setting the stage for a stagflated economy. Given the Global macro scenario and the sad state of our domestic internals the country seems to have lost its direction.The hanging fate of the Eurozone,the chinese mysteries,social upheavals across the face of the globe, the dollars appetence for currency wars would further push us in the arms of policy makers for solace.Well I am not worried about markets falling anymore,I am psyched that the markets would just whisper for a long time to come.

The fed ,my cousin,

2008-12-25T01:48:00.000-08:00

September seems to be spreading as the year draws to a close ,I get out of my slumber,U.S.A has becme u.s.s.a (Union of soviet socialist America)its just that you guys still don dare call it that way.Citi has been bailed out again and a host of others are restructuring &positioning their business to reach out for the TARP(troubled asset relief programme).The irony seems to be neverending.The government has decided to go by the ratings of Moodys S&P to back up all MBS ha ha ha,these were the rating agencies who rated all securities that collapsed as AAA.The crisis has spread across to everybody with Auto in the verge of collapse. When I asked my 24 yr old innocent cousin( studying in the U.S) on why the erstwhile U.S.A attacked Iraq,he believes its Americas pride. booked his tickets to India when crude was 140$ a barrell,While I still know he is good at what he does,the fed is my cousin.Morgan stanely and citi group are on the look out for storage tanks for storing crude bought at 100+$ . My childhood pal Dileep believes that the America could bounce back its only a matter of time.The 700bn $ bailout is now running into a few trillion dollars,Auto has been bailed out after much thought and many a clause and no one knows when GM would pause. ,Artificial injection of money into the economy could actually create more pain coz I see this money being used in stopping companies from failing,Citi after picking up a few billion dollars and 306 bn dollars in guaruntees still would cut close to 200,000 jobs.Scores of Americans would be losing their jobs in the days to come :).There are people who argue on %ages that the great depression had 25% unemployment in U.S and this time its just 7% what they need to understand is absolute numbers.As banks and businesses get ready for another round of bailout,Happy newyear America.

Wake me up when September ends;)

2008-09-28T05:00:00.000-07:00

Here comes the rain again
falling from the stars
drenched in my pain again
becoming who we are
Not many in the world (atleast in the financial world) would like to remember The september of 2008 for obvious reasons.Seven years after 9/11 an equivalent pain this time "Its war against error "and not terror.The exuberance of investment banking has ended and we are in the midst of more pain,speculating on even more catastrophies in the days to come.The $700bn bail out of Mr.President would definitely help stopping consistent breakdowns of Financial institutions going forward.
Lehman brothers would have gained more popularity brand awareness & recall after it filed.A 158 year old company crashing under its own weight,suspended from trading across exchanges makes customers in rural India raise eyebrows on the credibility of Indian banks.
When everybody is awed about such big nameslike AIG,Merril lych,WAMU and a host of them collapsing ,to me its Nothing lasts forever.Nothing that is man made could ever be eternal.Markets are real time and does not stand by your decisions.To me the learning is that markets does not spare anybody and definitely the bedlam of events is a failure of risk management .The $1 trillion war on terror and the back to back $700billion bail out on error could'nt have come at a better time.
Whom are you going to fight it out against this time Mr.president?isn't it even more exciting to see thses crashes being so systemic in just eight years.
Is the US really a capitalistic country ??
To me this is the new revolution in the world,there is gonna be change in leadership The citi could be put to sleep soon(hopefully with less pain ).The era of US controlling the world is gonna end very soon.The only ones in the developed worlds who have survived this are the European bigwigs like Barclays,HSBC,Stan C&Deutsch."Life is about losing relevance over a period of time "so will the US in the years to come .
Back home its gonna be a roller coaster in the days to come.Markets are definitely going to be bearish ,economic slow down is inevitable till the first half of next year. Atleast Policy makers are not gonna be figuring on whom to bail out.
CHINDIA is the name of the game going forward and for the US there are more septembers in the years to come atleast one every year by any standards.

Headlines like this

2008-08-31T16:09:00.000-07:00

I get back home from a days work battling out numbers all day,I run through the news channels it was fun watching headlines in India's top Business channel NDTV PROFIT.
"MARKETS TO BOTTOM OUT@11000.SECULAR LONG TERM OUTLOOK POSITIVE ON INDIA"Wow this to me is like somebody telling me 2020 is a leap year and February would have 29 days in it.I should confess that the trip on this news was orgasmic,and was more than a confirmation on business channels crap.My friend a google analyst speaks about bounce rate on blogs and spicing up news to deliver it hot.I do not know if this is what she suggested, I'd rather preach sense than spicing up.
JK a trader friend of mine when I say "I am bullish/bearish on a counter "pounces on me will it happen today??Markets are unpredicatble and governed by randomness and no one can predict all the irregular curves that are to be formed.But that to me does not justify marvellously vague predictions like these headlines.
What is more funny is the analyst's calls& programs in these channels,If somebody ever had a systematic review on these calls cartoon network would improve its TRP ratings.
No one ever were close to talking about a correction on the nifty in Jan let aside a crash.And the best part is the disclaimer "We are not responsible for profit or loss ..........".
Channels should be more accountable and sensible on what they speak.
Last week Bloomberg had published an obituary column on Steve Jobs for a few minutes I suppose,Others followed suit .Steve was seriously ill in the hospital and might have been attending a board meeting on his new iphone 3g .Too err is human but to copy it is superhuman.
Welcome to the world of media the socially irresponsible goons.

MNC bank exits retail assets business in India

2008-08-23T23:59:00.000-07:00

Global major Standard chartered Bank exited the unsecured Personal loan business and the cards business in India on Friday.The management reasoned negative operating margins in these businesses to their employees for the exit,High interest rates round the corner &incidental voumes which are unsustainable Mr.Neeraj swaroop is heading in the right direction. News is around the corner that Stanc is looking at closing all retail business and focus on corporate financing.The bank seems to be oblivious about the fate of its employeees.What is notable is Stanc,HSBC,GE and a host of other banks were forced to exit the auto business when rates where as low as 7%.
The Indian retail market by and large has been a price driven market by leaders like ICICI (Mr.K.V.Kamath's baby)&HDFC.Banks were disbursing unsecured loans in less than a day ,based on credit records,past relationships distributing it faster than Coke or Pepsi.Banks were extending credit based on past track records(surrogate products)validating cash flows based on outflows rather than inflows and were absolutely clueless about factoring in economic slow down, future cash flows and weighing risk on the whole.Credit scoring and risk analysis would have been latin and greek to Indian credit buyers.
Rising rates ,stringent credit norms by all banks,technology in place for credit history checks credit off take in itself has slowed down considerably,Volumes in the market has dropped atleast by 50% in the first half of this year.
With cof climbing everyday and MNC banks finding it difficult to raise cheaper capital @home and abroad others too will soon fall like apack of cards.What would be interesting to watch is ,how late entrant Barclays bank shapes up their retail porfolio in the next few quarters. Homeloan Interest rates expected to touch as high as 18%,stringent credit norms,optimum due diligence &technology in the foray The great Indian credit squeeze is on its way.

NIfty outlook

2008-08-10T10:58:00.000-07:00

Nifty @4529 a whooping 700 points from the lows of 3800's.Is the market set to rally and all the bearishness has ended??.With crude trading below 118 dollars per barrell off from the highs of July 11 does that mean all pains are over??A look at the one year chart tells us that markets could have made a double top at 4620 and reversing from there.And after all markets have rallied 700 points and it makes sense to book profits. While crude might continue to fall that to me is no reason why markets should go up.Crude as a commodity would continue to fall with an economic slow down across the globe.When I rewind back at the bull run between 2004 to 2008,with markets trading on 22 times forward earnings,it was just the gush of money that was chasing paper.With interest rates on the higher side retail slow down in India most banks exiting select retail business the next 12 to 18 months isn't gonna be all that rosy.Interest rate sensitive sectors like Auto and two wheelers would have to part away with profits to keep up the shop floor running.Every up move could be viewed as an opportunity to exit or build short positions on the F&O side.Needless to say banking and brokerages would continue face the brunt of the pain in the current scenario.Power & infrastructure have always been long term and would show little recovery in such bearish conditions.With the dollar regaining its strength frontline IT and pharma stocks could be good bets in the medium term,Buying on dips in these stocks should deliver upto 40% returns on a one year time frame.Having said all that with the Nifty unable to breach the 4620 mark there is definitely more pain in the days to come.

Market scenario

2008-08-06T11:11:00.000-07:00

Inflation at double figures,interest rates climbing higher day by day,Credit norms tightened ,Retail slowdown,Oil on boil.Guess nothing looks positive and the India inc story looks to be falling like a pack of cards.Well everything that goes up has to come down,Thats the wierd rule of markets, for people who were not part of the party for the last four years I guess they would be telling their near ones and dear ones "I told u"perhaps with high fives.Well every economy does follow a cycle and thats what is happening,the era of cheaper credit could be over,and the worst is yet to come,Perhaps real estate is waiting by the sidelines for crashing.To me as I rewind , in a country where 2 decades ago color TVs was an amusing phenomena and cars were next to impossible,India inc has moved by leaps and bounds in terms of reaching world class services to the common man be it mobile or a Maruti car,products and services today are available to the masses and not just the classes.The current economic slow down when looked back i believe is no slow down at all.Well the past is no benchmark at all,there are still millions in this country who do not have accesses to basic amenities like water,shelter, food and children who cannot afford primary education.While the urban youth in this country might crib and whine about bad roads, hike in gas prices,most of us fail to understand, even look at where we come from.Global slow down in terms of U.S banks melting down writing down billions of dollars in subprime losses will surely have an effect of India,but sooner or later the west has to end the quest for supremacy.The millenium definitely belongs to India.