Sunday, June 26, 2016

BREXIT, REXIT what next?

Both the events which would have negative impact on the markets happened. First REXIT and then the BREXIT. BREXIT was unexpected and let us see how it pans out.

1. Typically, my experience in the markets states that if there is a sell off on a Friday it continues and peaks on a Monday. So, in all likelihood the fall will continue on Monday.

2. This is a very good buying opportunity for all those yet to buy and for those who have booked profits. We could be correcting the move from 7715 to 8295 or the entire move from 6825 to 8295.

3. If we are correcting from 7715 to 8295, the targets are 7940 (already achieved), 7860 and 7805. Below 7805 we are in for a deeper correction. So, 7805 one should ideally finish 50% of the buying to be done.

4. Now if we are correcting whole move from 6825 to 8295,  the targets are 7849, 7653, 7495,7337 and finally 7100.

5. The monsoon session will start sometime in the third week of July and GST seems to be likely to be passed by then. If that happens, then there will be another big rally in the making.

6. BREXIT impacts are still 2-3 years down the line. First the UK Government has to trigger clause 50, 2 years after which the divorce will be complete. PM Cameroon is talking about letting the next PM do that so that will not happen before October 2016 at the eariest. The exit will happen towards late 2018. In the meantime, UK will have to come up with trade agreements with other countries to replace the existing ones.

The Results month is typically a range bound month. So, expected limited immediate upsides, some correction and sideways movement. This is a very good buying opportunity.


1 comment: