The markets lost 1.5 pc this week to close at 5209. In the last 2 weeks, the markets have gained a net of 2 points. Its a listless and range bound trading. The optimist may say that the markets are not going lower. The pessimist may say neither is it going higher. Either ways the markets need a strong trigger. Let us try and explore the positive and negative triggers.
Positives:
1. The Parliament will be back in session in a few days time. If the provisions of GAAR are softened, the FII flows will return.
2. The early forecasts about monsoon are positive. If the trend continues, the markets have a reason to rally.
3. Facebook IPO is scheduled for early June. Globally markets may be kept buoyant till the IPO goes through. It will have a spill over effect on our markets.
4. We have rallied for 2 months and corrected for 2 months. In spite of this we have corrected just barely about 50 % retracement which implies that this down move is only corrective in nature.
Negatives:
1. The FII flows are drying up. Without the FII money our markets will go nowhere.
2. The policy paralysis continues. Diesel is being subsidized by 15 rupees and petrol by 7 rupees and the government seems intent on doing nothing and let the oil companies bleed.
3. Ruckus in the parliamentary session and inability to pass any key bills will led to further tanking of the markets.
4. The Spanish worries if they escalate could lead to the global markets tanking. Our markets will just follow the global markets.
5. A weak rupee is making oil imports expensive. The Iran threat has almost passed.
I see a downside of maybe 100-150 points and then a potential upside of about 500-600 points minimum. Rallies don't peter out in a whimper. There has to be buying frenzy before we end this up move. This is missing. Hence, I would be a buyer on dips accumulating quality stocks.
Positives:
1. The Parliament will be back in session in a few days time. If the provisions of GAAR are softened, the FII flows will return.
2. The early forecasts about monsoon are positive. If the trend continues, the markets have a reason to rally.
3. Facebook IPO is scheduled for early June. Globally markets may be kept buoyant till the IPO goes through. It will have a spill over effect on our markets.
4. We have rallied for 2 months and corrected for 2 months. In spite of this we have corrected just barely about 50 % retracement which implies that this down move is only corrective in nature.
Negatives:
1. The FII flows are drying up. Without the FII money our markets will go nowhere.
2. The policy paralysis continues. Diesel is being subsidized by 15 rupees and petrol by 7 rupees and the government seems intent on doing nothing and let the oil companies bleed.
3. Ruckus in the parliamentary session and inability to pass any key bills will led to further tanking of the markets.
4. The Spanish worries if they escalate could lead to the global markets tanking. Our markets will just follow the global markets.
5. A weak rupee is making oil imports expensive. The Iran threat has almost passed.
I see a downside of maybe 100-150 points and then a potential upside of about 500-600 points minimum. Rallies don't peter out in a whimper. There has to be buying frenzy before we end this up move. This is missing. Hence, I would be a buyer on dips accumulating quality stocks.
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