November 2012

Trading levels 5th / 9th November 2012



Last week, RBI disappointed market by not obliging with a REPO rate cut which resulted in a moderate down day - taking NIFTY out of tight range of 100 points which was held for last 2/3 weeks. However, a gap-up on Friday ensured that we were pushed into this 5630 / 5730 range again and in fact, we hovered at upper end of the range for some time.

But Monday could be different since, on Friday, US markets gave back most of the gains made on Thursday. This really does not augur well for US markets and correspondingly for our market. Dollar Index has moved up significantly resulting into sharp downtrend in commodities and Indian Rupee is also expected to weaken at opening on Monday.

Friday’s up-move was on the back of strength shown by FMCG stocks ( from the lows ) and AUTOs / private sector banks. The momentum brigade did not participate as much.

I still maintain that NIFTY has been pulled up time and again to facilitate distribution at higher levels.

I wish to reiterate that I will be extremely wary of taking further long positions till we have a clear break-out again beyond the recent high of 5800+.

US Presidential poll on 6th November holds all the keys to further direction for US markets as well as global markets. If Romney wins, it will be a disaster for global markets – particularly Emerging Markets like INDIA.