Sunday, July 28, 2013

RBI Policy on 30th July to determine short term movement

The markets declined about 2.4 pc to close the week in the red. This was on the back of RBI further tightening the interest rates to prop up the rupee. This led to the banks tanking and taking the markets down with it. The Markets are at an interesting point right now.

1. The current rally from 5566 to 6093 has been led by FMCG, Pharma, IT and Oil and Gas Sector.The banks have taken a substantial beating. The Bank Nifty has corrected around 20 pc from its peak where as the Nifty has corrected only about 5 pc from the top.

2. This now leaves with 2 possibilities.

a. The Top is in at 6229 and we face a long grind down to 4000-4300 levels.

b. 1 more up move is pending to top around 6500-7000 before the grind down.

For the Bullish probability to come true, the Banks need to rally. Any further bad news on Tuesday and it is the end of the road.

3. If this is just a correction, then the markets should pause at 5829, 5767. A fall beyond 5671 will terminate the entire rally.

4. The market is touching a cluster of supports between 5820-5860. A bounce from here can face a resistance at 5950-6000 range. A move beyond 6050 will suggest a resumption in the up trend.

5. Fundamentally, a  good monsoon, reduction in Gold imports are all good signs. The Electoral uncertainty remains.

Now, is the time to be cautious and do only selective stock based buying. Stick to good quality stocks with ample liquidity.


  1. Hi....
    your blog is simple and super....
    Can you please view whether we are in a massive ascending triangle pattern formation on Sensex weekly charts...
    and if so we can expect huge breakout in next few weeks.

  2. 5621 and 6045 are key levels. A break of either could lead to 5200 or 6450