Sunday, July 7, 2013

Trapped in a Range, awaiting the Results season

The Nifty gained just 25 points or 0.4 pc for the week. There was an absence of major triggers for the markets. The next cue will be from the Q1 Results which will be kicked off by Infosys next week.

1. The markets are correcting the up move 5566 to 5904. This is a corrective down move featuring 3 legss.

A - 5904 - 5760
B- 5760 - 5900
C - 5900- ???

This could be anywhere in the range of 5760 to 5677. The supports come in at 5735 and 5695.

2. Typically, in the first 2 weeks of the months, sometimes the markets are kept range bound so that the premium is eaten up by the Option Writers.

3. HUL open offer helped the company to raise the stake to 68 pc rather than the targeted 75 pc. This is a vote of confidence in the HUL stock by its Management and in the longer term 600 may act as a floor for the stock. In the shorter term, the stock may come down to 520-550 levels.

4. Infosys results are due on July 12th which is Friday. The Results may be subdued. This is the first time, the Results are being declared after Murthy joined back on 1st June. The Street would be watching for future guidance from the Management rather than the current Results.

5. The 10 Year G-Sec Yield is now back up to 7.5% and this is a good opportunity to add up on G-Sec funds. I expect a return of around 10 pc from these funds in  the next 1 year.

6. Gold continues its downward spiral. Gold is 1 asset class which I would avoid for the next 6 months.

7. The FII selling has also stopped. Even though they are not buying huge quantities, the selling has stopped.

In a nutshell, a quiet phase in the markets. It is also a time to accumulate good quality stocks.

No comments:

Post a Comment