Sunday, November 9, 2014

Markets consolidate their gains

It was a truncated trading week with the markets open only for 3 trading sessions. The markets closed flat for the week but many stocks hit their all time highs. Let us explore what can happen next.

1. The Modi Government Cabinet expansion is a significant milestone. It inducts many new dynamic faces like Manohar Parrikar and lessens the workload on existing Ministers.

2. The Winter session commences on November 24th and all eyes will be on how the Government clears the pending legislation. This can influence the way the markets move.

3. With the Bank of Japan announcing stimulus, the easy liquidity continues. This will ensure the FII flows and the data for November has been positive so far from the FII inflows.

4. The crude oil prices continue to remain low thus helping the fiscal deficit.

5. The markets have given a technical breakout and the targets could be between 8450 - 8600. There could be a 10 pc decline either before the budget or after the budget.

6. At 8300+  levels, it does not make sense to create fresh positions but rather book partial profits so that the same funds could be re-invested at lower levels.

7. The Gilt 10 year yield has dropped to 8.21 pc. it could drop further depending on RBI action.

A 10 pc correction could be expected after we rally about 200 points higher. That dip would be a buying opportunity.

1 comment:

  1. Very informative post here. It's not everyday that you see things like this. As a learner, I find this very useful. loyal client growth