Sunday, August 25, 2013

Settlement Week to drive the Markets

The markets had a sharp dip followed by recovery in the later part of the week to end at 0.7 pc down. The Rupee, Government Bonds and the markets all recovered towards the end of the week.

1. The Equity Markets will have their monthly settlement on the coming Thursday. Many times during the time before settlement, markets move in opposite direction to how they have moved throughout the month. This is a thumb rule and need not be the case always.

2. The Markets have over reacted and there could be some recovery towards the mean. The markets always tend to over react in either direction and then pull back towards the fair value.

3. The Monsoon Session will continue and this may be the last few sittings of this Parliament to get any meaningful work done.

4. The current levels were strong supports in previous falls and typically supports turn into resistances and vice-versa.

5. Export oriented stocks will do well with the fall in the Rupee

6. The Retracement levels to watch out will be 5504, 5563 and 5654 all historically key levels too.

7. The FIIs have kept on selling now. That is the figure which may keep the up moves in check. The markets move in strange ways. In early August when the FIIs were buying they kept falling and now when they are selling, the markets are rising.

The Strategy remains same. Use the high yields to park money and wait for lower levels to buy stocks.

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