Hi,
After we are done with our FNO expiry successfully on a bullish note, May is definitely a month that every trader is eying for. Now for May I'm surprised to see some bearish day dreaming. Seems like people are obsessed with shorting and everytime when market takes some breather or reacts to short term global cues for downside they got caught in the feeling of de ja vu. But the thing is that markets are not the same everytime. We've seen last quarter results they are almost the same or rather I see them improving, but the major weightage that market takes while determining prices are sentiments and this single factor is ignored by majority of us. Now if sentiments got some solid backing they become market drivers for the time being.
An extract from ET which I'm quoting here coz it looks more convincing to me:
"India’s chief statistician Pronab Sen said, “Keeping in mind the fact that a majority of the corporates have only deferred their investment plans and have not scrapped them altogether, I would say that if the global scenario improves, the growth rate in India will pick up at a fast pace.”
Going by a survey conducted among manufacturers, industry bodies like FICCI too share the optimism. In the current quarter, prospects look better for the Indian manufacturing sector, with six out of 12 sectors likely to witness positive growth.
These are textiles, metals and products, machinery, cement, FMCG and miscellaneous industries.
You can go through the article here
Above chart of Nifty suggests that this time there can be a possibility of breaking out of this range. Now most of analysts are arguing that we got a very stretched rally and it needs some correction. Really? On charts we have spent 13 days call it a breather or correction in the range of 3300-3500. Now assuming that we have formed a base in this range and scenario is bullish chances are fair for breaking upside given quarterly results of corporates are satisfying and global cues are supporting there is no reason for a emerging country like us going back to our month old bearish range of sub 3100.
A look at recent charts of DJIA gives fair indications that despite of their banks put through stress tests market is not willing to leave its 8000 marks rather we've seen surprisingly solid attempts to breakout upwards. The results from stress tests of the 19 largest U.S. banks are expected to be released on May 7, till than we can see the DJIA giving nice moves on both side, but looking at charts it seems that that banks are going to pass the stress :) Have a look:
Gold an Inverse to Equity
If we have a look at last quarter or the above 60 day gold prices clearly we can see that it is inversely related with equity or say people are parking their fund into equity by pulling out from gold. Atleast for the current scenario it holds true as exchanges are rallying upward nobody want to be left out. Lets pray gold dips further below 880 to keep bullish ticks alive!!!
Crude Bottoming Out
Crude is one of the major indicator for the world economy's health. Why? coz we can easily relate economic activities more better now than earlier. Analogy is simple major production activities are carried out on crude be it production or transportation, so if countries are really producing anything and trading their goods crude is the thing which they definitely need. So keeping an eye on crude if economic activities are beleived to be resuming we can see the demand of crude spike up in the coming months.
So finally Election season is ending in the May. It is interesting to see how much weightage does our stock market gives to it. Definitely untill results are out things are going to be volatile and money can be made in this 3300-3500 range through straddles. Keeping the scenario that we are again going to have an unstable government downside range can be fairly shifted to 3150. Rational being that if world economy is consistent enough, in no way we can go back to sub 3100 levels afterall it is unanimously beleived that whenever be the next bull run BRIC countries will be first to witness growth. So discounting the results of coalition government we still be in bullish channel. As per me a complete set back to bearish level will be in scenario if we fall in line with global indices and slump below 3150 level. That time will be interesting to see - "Abandonment of Hopes". Till the its wise to ride on Slope of Hope.
Hope you loved reading it.
After we are done with our FNO expiry successfully on a bullish note, May is definitely a month that every trader is eying for. Now for May I'm surprised to see some bearish day dreaming. Seems like people are obsessed with shorting and everytime when market takes some breather or reacts to short term global cues for downside they got caught in the feeling of de ja vu. But the thing is that markets are not the same everytime. We've seen last quarter results they are almost the same or rather I see them improving, but the major weightage that market takes while determining prices are sentiments and this single factor is ignored by majority of us. Now if sentiments got some solid backing they become market drivers for the time being.
An extract from ET which I'm quoting here coz it looks more convincing to me:
"India’s chief statistician Pronab Sen said, “Keeping in mind the fact that a majority of the corporates have only deferred their investment plans and have not scrapped them altogether, I would say that if the global scenario improves, the growth rate in India will pick up at a fast pace.”
Going by a survey conducted among manufacturers, industry bodies like FICCI too share the optimism. In the current quarter, prospects look better for the Indian manufacturing sector, with six out of 12 sectors likely to witness positive growth.
These are textiles, metals and products, machinery, cement, FMCG and miscellaneous industries.
You can go through the article here
Above chart of Nifty suggests that this time there can be a possibility of breaking out of this range. Now most of analysts are arguing that we got a very stretched rally and it needs some correction. Really? On charts we have spent 13 days call it a breather or correction in the range of 3300-3500. Now assuming that we have formed a base in this range and scenario is bullish chances are fair for breaking upside given quarterly results of corporates are satisfying and global cues are supporting there is no reason for a emerging country like us going back to our month old bearish range of sub 3100.
A look at recent charts of DJIA gives fair indications that despite of their banks put through stress tests market is not willing to leave its 8000 marks rather we've seen surprisingly solid attempts to breakout upwards. The results from stress tests of the 19 largest U.S. banks are expected to be released on May 7, till than we can see the DJIA giving nice moves on both side, but looking at charts it seems that that banks are going to pass the stress :) Have a look:
Gold an Inverse to Equity
If we have a look at last quarter or the above 60 day gold prices clearly we can see that it is inversely related with equity or say people are parking their fund into equity by pulling out from gold. Atleast for the current scenario it holds true as exchanges are rallying upward nobody want to be left out. Lets pray gold dips further below 880 to keep bullish ticks alive!!!
Crude Bottoming Out
Crude is one of the major indicator for the world economy's health. Why? coz we can easily relate economic activities more better now than earlier. Analogy is simple major production activities are carried out on crude be it production or transportation, so if countries are really producing anything and trading their goods crude is the thing which they definitely need. So keeping an eye on crude if economic activities are beleived to be resuming we can see the demand of crude spike up in the coming months.
So finally Election season is ending in the May. It is interesting to see how much weightage does our stock market gives to it. Definitely untill results are out things are going to be volatile and money can be made in this 3300-3500 range through straddles. Keeping the scenario that we are again going to have an unstable government downside range can be fairly shifted to 3150. Rational being that if world economy is consistent enough, in no way we can go back to sub 3100 levels afterall it is unanimously beleived that whenever be the next bull run BRIC countries will be first to witness growth. So discounting the results of coalition government we still be in bullish channel. As per me a complete set back to bearish level will be in scenario if we fall in line with global indices and slump below 3150 level. That time will be interesting to see - "Abandonment of Hopes". Till the its wise to ride on Slope of Hope.
Hope you loved reading it.
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