DOW JONES sold off badly as expected

DOW JONES sold off badly as expected

In our past market updates, we have been warning about the imminent upcoming sell off in USA Dow Jones index, the resistance of India and other EMs to bow down and follow it on the down side as well as how they will not be able to cop with a heavy sell off in the same. While the Dow Jones decline was given, and the Indian markets touched their upper end of the range that it has been trading for some time; those in knowledge of the pattern made good money on both up and down side.

As of writing this Indian stock markets are yet to open and on Friday DOW JONES shed another 500 points, Asian markets are about mixed, and SGX NIFTY also not a lot indicative with flattish or non-indicative bias. We maintain sell on rise and buy on dips with stock specific movement.   

Read recent articles for more insight as the structure of markets and present trading strategy remain same more or less.

We do not believe that the cut in GST rates will have a great deal of impact in view of the monthly movement of markets.

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NIFTY 50 INDEX – CMP – 10800- A Very Brief Simple Review

NIFTY 50 INDEX – CMP – 10800

The nifty index is looking overbought for the time being and we believe its time to exit longs and possibly enter short positions, it can be done by shorting calls which is best way, and other relatively pricey method is buying puts.

At the same time we maintain that the market is in sideways, low volatile, non trendy, low volume, range bound phase, and likely to remain so with only some intraday ups and downs with more and more individual stock moves. The reaction of markets to RBI governor resignation and the slack performance of ruling BJP party in 5 state assembly elections does not say anything but reinforce the same fact. We believe the oil and gas and some other beaten down sector would benefit with the sideways market and may rise along with some other beaten down NBFC stocks. The market may rise only due to lack of short selling, and will tank due to lack of buying as stocks hits resistance in due course.

In case market gaps up tomorrow due to oversold European and Asian markets bounce back and non negative reaction to BJP losses in election, then we may see 11000 nifty level and domestic bout of stock buying for few weeks with same range bound non momentum trend.

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This is only a brief analysis and not a complete research report.

The given views are subject to change depending on changing market and global economic conditions. Become member to benefit from market and individual stock moves. Become member to get alerts for buy and sell with targets. Please read complete disclosure, disclaimer on our website.

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Indian Stock Market Commentary - 15 Sept 2018

               Last week the market saw high volatility as it was expected from it. However, the later half of the week was expected to be choppy and flat but gave the bounce back which surprised bulls more than the bears as they were not expecting it so fast and swiftly, that too without those moves in biggies like Reliance Industries and the likes which have been moving the markets upwards since last 1000 points of NIFTY Index.
               This week and the previous week starting from the first of this month saw decline without any new news factor in Indian stock markets, which brought down NIFTY from the lifetime high 11750 levels to 11250 levels, about 500 points decline in 10 days time. However the news of PM Modi convening an emergency meeting regarding the situation and announcing possible moves made the oversold market cheer up and rise for last two days of the week and recover half of the correction or 250 points. 
              However we do not think that the friday gap up open can sustain and we might see selling back to that gap in next week as the market discounts the measures announced by PM Modi on monday morning open. When there is no sufficient buying the markets could again get back to backfoot until the friday gap is filled and biggies like Reliance Industries and the IT pack does not again start to lead the markets. The pharmas are good on the way up, but they don't have the fire power to run the benchmark Indices. 
                 The measures announced by the government are mainly targeted to arrest the falling rupee and the impact of which will be not significant on the stock market correction or rally perspective. So, for now the technicals will continue to rule for the short term traders in the equities. 

              It is interesting to understand that the market was rising, for parts of it, due to the fall in the Indian currency, and all the benefits it gives to the exporters, IT firms, the pharma companies; but when the fall became steep and worries about the high inflation due to higher fuel prices (fuel is biggest import of our country) and its domino effects, the Current Account Deficit situation and possible rating downgrades; made the market to look and think the other side of the coin. 
             Having said all these, we believe that the next week is going to be as difficult to trade for bulls esp. as it was the last week, and we do not think that it will be one way ride up again and time to take positional longs is yet little far away. The stock specific moves on both side will continut to be available in specific pharma, IT, banking names. The hetherto leaders like RIL, etc. will continue to languish and not lead the market up. IT is taking a breather and without this rupee fall panic getting in place, it is unlikely we can see buying coming back in it again, they should be waited to be baught when it does, and it will.
          

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