Sunday, November 27, 2016

Corrective Up Move

This week Nifty made a bottom at 7916 and that bottom held for 4 trading sessions after that. The market will look for cues from the RBI meet.

1. The markets took support at the Bollinger Band. The market is correcting the down move from 8598 to 7916 and one can expect an up move till 8185, 8257 or 8337.

2. The RBI has come out with a  notification saying 100 pc CRR for incremental money kept with it from Sept 16. What this means is right now in the wave of demonetization, the banks were keeping money with the Reserve Bank and getting 6.25 % interest, taking the money from the public at 4 %/ So, the banks were earning 2.25 % as arbitrage money. Now, they would be forced to lend aggressively bring down the lending rates.

3. The RBI policy meet on the 7th of December and the US Fed meeting are the next 2 triggers for the Markets.

4. I expect the correction to be over in December, the demonetization mess also seems to be clearing up.

Every decline is a buying opportunity. 7650-7800 seems to be a good base for the markets.

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