Sunday, December 4, 2016

The Down move resumes

The markets almost tested the 50 pc retracement of the fall from the top made after Trump election and then the down move seems to have continued.

1. A dip below 8000 will confirm that the downtrend has resumed.

2. A key feature of this down trend has been the non stop selling by the FIIs. The DIIs have stepped n and bought a large quantity else we would have been at 7500.

3. The first half of December will have the RBI policy meet coming up, the US Fed meet and all the action is expected in the first 15 days. I expect the first 15-20 days to be negative and then the markets will pick up.

4. Elliot wise a last leg of fall of 700 to 1000 points is pending. I expect 7500-7600 to hold.

5. The RBI will have to go in for a 25 basis points cut. They are now behind the yield curve that is the rates have fallen below the rates.

6. The auto sector seems to be resilient and  the sales of 4 wheelers have not dropped dramatically as expected.

Every dip is a buying opportunity and one should take advantage of this fall.

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