Sunday, April 10, 2016

Sell on News Event materializes

The RBI Policy has come and gone. It announced a 25 basis point reduction and not the 50 basis points which the markets was expecting. April is a month of corporate results and I expect  the markets to be flat with a negative bias.

1. The entire rise from 6825 to 7777 can be corrected. The targets for this correction can be 7413, 7301, 7188 or 7050. This would be the dip which presents a very good buying opportunity.

2. The RBI will not cut rates further till it gets to see the progress of the Monsoon. The GST Bill also is not likely to get passed very soon.

3. The FIIs have become marginal net sellers for the month of April so far. Any up move is largely dependent on FII inflows.

4. Stock moves have become very sector specific. In the last 2 weeks, the Pharma stocks were heavily battered. Front line Pharma stocks are always a very good bet. The USFDA observations are always closed.

5. Globally, the markets do not have any positive clues.

6. The next 2 weeks are truncated weeks with 3 trading holidays on April 13, 14 and 19. This will lead to very subdued movement in the markets.

7. The Corporate earnings are expected to set the tone for the markets which will start coming in from the next month.

8. There are 2 ways at looking at this rally. 1 is that the correction ended at 6825 and this is a fresh impulse under way. Second is that this is just a corrective up move and 1 more leg down is pending to new lows.
Whichever way one looks at it, 7250-7400 seems to be on the cards and which would be a very good buying opportunity.

1 comment:

  1. Holiday on April 14.15 & 19.
    Nifty has recovered nearly 150 points today, Would appreciate, an update for uprise towards 7700+ rather than about lower levels below 7550.

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