Sunday, July 25, 2010

Markets Next Week

The markets have certain key events lined up for this week:

1.The RBI Credit Policy on Tuesday 27th July. A Repo and Reverse Repo hike of 25 basis point is already factored. If there is no CRR Hike and no 50 basis points hike in Repo and Reverse Repo then expect a relief rally

2. The Stress Tests are done with. 7 out of 91 Banks failed. The jury is still out on whether the tests were rigorous enough. Expect the party to continue for a few days more.

3. This rally is 8 weeks old and achieves times equality with previous rally. I expect that this week may end on a negative note week-on-week. If not, then we are onto something very bullish. All Rallies since March 09 have been diminishing time – wise.

4. The Monsoons are no more a worry and the results have been overall good. The only way a downward trigger is from global factors.

5. It will now take a Black Swan event to cause the markets to crash now. Check out what Black Swan means on google.

6. The Breadth is poor and number of stocks making new highs is very less. Classic Distribution? Time will tell. Reliance is stuck at 1060 and for the Markets to comprehensively move up Reliance has to go above Rs 1100.

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