If one goes by the headlines, there is doom and gloom ahead. Airlines are going bust, people are being laid off, bond yields have crossed 9 pc and Italy tethers on the brink of a collapse. Lets us look at things in detail and try and find a silver lining to the cloud.
1. For any medium term upside, 5390 - 5400 remains the key resistance. There are a confluence of resistances here. The previous high comes at 5399, the 200 DMA comes at 5390 as also the lines joining previous tops from 6339 comes at this value. Prudence suggests that one should not go long before 5400 is breached.
2. On the downside, fresh shorts could be taken below 5072 and 5011, the previous significant bottom. We are in some kind of consolidation move right now. This expiry is 9 trading sessions away and we wait and watch. In this series it is only the Option writers who have made money.
3. Fundamentally, Kingfisher is in trouble. The problem is not as simple as an airline going bust. It has a cascading effect. Several banks have a very high exposure to the airlines and their NPAs will go up. The Power sector also has NPAs rising and banks will be wary of lending to the power sector as well.
4. The government bonds are trading at an yield of almost 9 pc. The Repo Rate is at 8.5 pc and will raise further in the month of December. The high yields imply that government bond supply is not being absorbed by the market. In simple language, government is borrowing big time from the markets.
5. Gold is also trading in a range. The previous top needs to be taken out for investments to be made in gold. The rupee has breached the psychological Rs 50 mark. Weak rupee means the companies which import are in trouble. India is an economy which is a net importer and hence the fiscal deficit target of 4.6 % is not likely to be met.
6. With elections in the key states of UP and Punjab round the corner expect no fiscally prudent measures from the government at least till March 2012.
Now, is the time to start nibbling at stocks, systematically picking the good companies. Those interested in stocks and gold investment advice, there is Lakshmi's Cherry Picks available.
Finally, a tailpiece on Austerity in these tough times by Sanil Sonalkar.
Financial year 2011-12 has truly marked the dawn of a new era of austerity measures being adopted by countries worldwide, caught in the midst of a recession which seems to be spreading by the day. The developed world, particularly the USA & the Eurozone countries, are grappling with huge debts and failure to pay sovereign obligations is becoming a stark reality. To tide over the crisis, these countries are resorting to unprecedented austerity measures in a ferocious bid to salvage pride and credit ratings (no pun intended).
Back home, the common man is increasingly feeling the burden of high prices and household budgets have taken a hit like never before - austerity begins at home too. The government,
almost belatedly, has tried to offer some respite by increasing the interest rate on the popular savings schemes - PPF, NSC, etc, etc. This may seem too little, too late.
A judicious mix of savings and investments is the order of the day in these troubled times.
Showing posts with label gold. Show all posts
Showing posts with label gold. Show all posts
Sunday, November 13, 2011
Sunday, October 23, 2011
Markets: The Week Ahead
It is a crucial week for the markets with the expiry on Tuesday and a curtailed trading week. TO complicate matters we have the RBI policy to boot on Tuesday. Let us see what the markets have to offer.
1. Expiry on Tuesday and RBI Credit policy on same day is potentially explosive cocktail. RBI should hike rates by 25 basis points. Anything less or more could trigger about 100 point moves on the Nifty.
2. The resistance of 5170 has held for 3 attempts now. Either we break it in the move or we tank to to test 4720. Above 5230, we can re-test the 5350-5400 zone.
3. If money is pumped in for Euro crisis and Greek gets a bailout, expect dollar index to go up, commodities to crash and gold to weaken in the short term.
4. One can look at investing in the Infrastructure Bonds of PFC covered in an earlier post.
5. The results are coming in and nothing spectacular to write home so far. The good results will be out and the ones declared later are usually nothing to write home about.
6. Infrastructure companies are bearing the brunt of the slowdown, like HCC and L&T.
I expect the markets to trade in a range in this truncated week. Have a safe, happy and prosperous Diwali.
Those interested in a package of Gold and Equity Picks investments can look at what Lakshmi has to offer.
Gold Rush and Investment Cherry Picks
1. Expiry on Tuesday and RBI Credit policy on same day is potentially explosive cocktail. RBI should hike rates by 25 basis points. Anything less or more could trigger about 100 point moves on the Nifty.
2. The resistance of 5170 has held for 3 attempts now. Either we break it in the move or we tank to to test 4720. Above 5230, we can re-test the 5350-5400 zone.
3. If money is pumped in for Euro crisis and Greek gets a bailout, expect dollar index to go up, commodities to crash and gold to weaken in the short term.
4. One can look at investing in the Infrastructure Bonds of PFC covered in an earlier post.
5. The results are coming in and nothing spectacular to write home so far. The good results will be out and the ones declared later are usually nothing to write home about.
6. Infrastructure companies are bearing the brunt of the slowdown, like HCC and L&T.
I expect the markets to trade in a range in this truncated week. Have a safe, happy and prosperous Diwali.
Those interested in a package of Gold and Equity Picks investments can look at what Lakshmi has to offer.
Gold Rush and Investment Cherry Picks
Sunday, October 2, 2011
Where does one hide now?
The last quarter has been bad for the equity markets. The Government borrowing is going through the roof and Gold prices are declining. What does an Investor do next? Lets try and work out the best investment avenues.
1. The Goverment has ended borrowing about 66 pc of their full year target in the first 6 months. This means in H2, they will borrow more. This means Rates will go up and Bonds yields have risen. Gilt funds will still have to wait for sometime or one can do a SIP in Gilt funds. Interest Rates are yet to peak out.
2. The US Dollar is strengthening due to safe haven status. This means all other currencies will weaken against the Dollar. The rupee may go down further and all commodities including Gold can correct 10 pc more. So, buying Gold doesnt make too much sense right now.
3. The Equity markets have been going down. There is fear and panic everywhere. Support levels are 4538, 4300, 4000 and 3700. One can start adding near each support level about 20 pc quantity.
4. Other Option is to invest in liquid funds or stay in cash. The inflation will eat away the value of Cash and liquid funds may give up 7-8 pc.
5. In the long term, if India has to do well, then the Equity markets have to do well. As Warren Buffet says, when markets fall the environment is so bad that no one ends up buying anything. Now is the time to build the future and start investing for the next 5 year horizon. SIP in Stocks which are of good quality.
The Nifty has support around 4900, 4840, 4720 and then 4538. upside resistance is the band of 5030 and a cluster of resistances around 5100 and 5200. Fresh shorts below 4840 and longs above 5169.
For those interested in stock picking in the downturn, I am enclosing the link of Lakshmi.
She has come up with the updates for the month of October 2011. I have helped in identifying the stocks on the basis of fundamentals.
Investment Cherry Picks
1. The Goverment has ended borrowing about 66 pc of their full year target in the first 6 months. This means in H2, they will borrow more. This means Rates will go up and Bonds yields have risen. Gilt funds will still have to wait for sometime or one can do a SIP in Gilt funds. Interest Rates are yet to peak out.
2. The US Dollar is strengthening due to safe haven status. This means all other currencies will weaken against the Dollar. The rupee may go down further and all commodities including Gold can correct 10 pc more. So, buying Gold doesnt make too much sense right now.
3. The Equity markets have been going down. There is fear and panic everywhere. Support levels are 4538, 4300, 4000 and 3700. One can start adding near each support level about 20 pc quantity.
4. Other Option is to invest in liquid funds or stay in cash. The inflation will eat away the value of Cash and liquid funds may give up 7-8 pc.
5. In the long term, if India has to do well, then the Equity markets have to do well. As Warren Buffet says, when markets fall the environment is so bad that no one ends up buying anything. Now is the time to build the future and start investing for the next 5 year horizon. SIP in Stocks which are of good quality.
The Nifty has support around 4900, 4840, 4720 and then 4538. upside resistance is the band of 5030 and a cluster of resistances around 5100 and 5200. Fresh shorts below 4840 and longs above 5169.
For those interested in stock picking in the downturn, I am enclosing the link of Lakshmi.
She has come up with the updates for the month of October 2011. I have helped in identifying the stocks on the basis of fundamentals.
Investment Cherry Picks
Sunday, August 21, 2011
Markets Next Week: A bounce due
The Markets continued their downward journey last week. They fell by around by 4.5 % to close at 4845. Gold hit new all-time highs. So what next?
1. Gold has broken all previous all-time highs and is now trading at 1850 dollars and ounce or close to 28000 rupees levels. I would wait for a dip before making a fresh entry. I foresee a short term top close by. Make o mistake, in the next 1 year gold will go much higher but in the short term we may see a buying climax.
2. The Nifty is in the 3rd wave down which will culminate some time next week.
C wave so far.
Wave 1 - 5944 - 5196 = 748 points
Wave 2 - 5196 - 5741 = 545 points
Wave 3 - 5741 - 4796 = 945 points and ongoing
Wave 3 can be sub - divided into 5 waves
Wave 1 from 5744 - 5454 = 190 points
Wave 2 = 5454 - 5552 = 98 points
Wave 3 = 5552 - 4946 = 606 points
Wave 4 = 4946 - 5198 = 252 points
Wave 5 5198 - 4796 = 402 points and going on
After this, we will have the entire retrace of fall from 5740 - 4796 which can be a 500 - 600 point rally on the Nifty.
3. The Retracement levels of entire rise from 2252 to 6338 come to 4777, 4295 and 3812 levels.
4. 4690 - 4740 were the previous highs in the rally which started up. So, this area can prove to be a support zone.
5. All the indicators are now touching levels last seen in Jan 2009. So, either we bounce in a day or two or go much deeper.
6. The 200 week moving averages were last broken sometime in Sept 2008. We are now testing those averages. A weekly close below 4930 spells gloom.
7. On the upside, 2 gaps need to be closed. 4946 - 4846 and 5323 - 5204.
In a nutshell, now is the time to prepare shopping lists and nibble at stocks. The Diwali shopping list which we prepared last Diwali can be a good starting point for stocks.
1. Gold has broken all previous all-time highs and is now trading at 1850 dollars and ounce or close to 28000 rupees levels. I would wait for a dip before making a fresh entry. I foresee a short term top close by. Make o mistake, in the next 1 year gold will go much higher but in the short term we may see a buying climax.
2. The Nifty is in the 3rd wave down which will culminate some time next week.
C wave so far.
Wave 1 - 5944 - 5196 = 748 points
Wave 2 - 5196 - 5741 = 545 points
Wave 3 - 5741 - 4796 = 945 points and ongoing
Wave 3 can be sub - divided into 5 waves
Wave 1 from 5744 - 5454 = 190 points
Wave 2 = 5454 - 5552 = 98 points
Wave 3 = 5552 - 4946 = 606 points
Wave 4 = 4946 - 5198 = 252 points
Wave 5 5198 - 4796 = 402 points and going on
After this, we will have the entire retrace of fall from 5740 - 4796 which can be a 500 - 600 point rally on the Nifty.
3. The Retracement levels of entire rise from 2252 to 6338 come to 4777, 4295 and 3812 levels.
4. 4690 - 4740 were the previous highs in the rally which started up. So, this area can prove to be a support zone.
5. All the indicators are now touching levels last seen in Jan 2009. So, either we bounce in a day or two or go much deeper.
6. The 200 week moving averages were last broken sometime in Sept 2008. We are now testing those averages. A weekly close below 4930 spells gloom.
7. On the upside, 2 gaps need to be closed. 4946 - 4846 and 5323 - 5204.
In a nutshell, now is the time to prepare shopping lists and nibble at stocks. The Diwali shopping list which we prepared last Diwali can be a good starting point for stocks.
Sunday, August 14, 2011
Markets: What next?
The markets lost a further 2.7 pc to close down at 5073. This is on the back of further negative news from Europe and US, a sharp spurt in Gold prices, good IIP numbers and FII selling.
1. The FIIs have sold almost 11000 crores this year ad 7000 crores in the first fortnight of August. The DIIs have picked up almost 20000 crores of shares this year and about 6000 crores in August. The market is down about 17 pc YTD. It is clear that the market dances on FII tunes. If the rupee weakens and the FIIs pull out cash, the market will go down.
2. Gold has given a breakout and is a buy on dips. As the currencies of the world weaken and the debt crisis increases, gold will go up.
3. SBI had a poor set of numbers. The NPAs are increasing and also the Rate Hikes look set to continue. Avoid the autos and the banks.
4. We had good IIP numbers and yet the markets fell. Why was this? This is because good growth means the RBI can hike the rates further to tame inflation and afford to sacrifice some growth.
5. Looking at the Elliot Waves, we are C wave from 5944
Wave 1 was 5944 - 5196 = 748 points
Wave 2 was 5196 - 5741 = 545 points
Wave 3 was 5741 - 4946 = 795 and ongoing.
Wave 3 should end this week and get set for a rally of about 450-500 points on the Nifty.
6. The band 4750 - 4900 has a confluence of supports and should hold for the present moment.
7. The gap area of 5204 to 5323 will act as a strong resistance. This gap getting filled up is the first sign of a bounce.
8. Open Interest points out to support at 5000 levels and resistance at 5200 and 5300 levels.
Strategy for the Week:
Historically for the past few months, the markets bounce towards end of expiry and hence cut shorts around the 5000 levels and be prepared for an expiry around the 5200 - 5300 levels.
1. The FIIs have sold almost 11000 crores this year ad 7000 crores in the first fortnight of August. The DIIs have picked up almost 20000 crores of shares this year and about 6000 crores in August. The market is down about 17 pc YTD. It is clear that the market dances on FII tunes. If the rupee weakens and the FIIs pull out cash, the market will go down.
2. Gold has given a breakout and is a buy on dips. As the currencies of the world weaken and the debt crisis increases, gold will go up.
3. SBI had a poor set of numbers. The NPAs are increasing and also the Rate Hikes look set to continue. Avoid the autos and the banks.
4. We had good IIP numbers and yet the markets fell. Why was this? This is because good growth means the RBI can hike the rates further to tame inflation and afford to sacrifice some growth.
5. Looking at the Elliot Waves, we are C wave from 5944
Wave 1 was 5944 - 5196 = 748 points
Wave 2 was 5196 - 5741 = 545 points
Wave 3 was 5741 - 4946 = 795 and ongoing.
Wave 3 should end this week and get set for a rally of about 450-500 points on the Nifty.
6. The band 4750 - 4900 has a confluence of supports and should hold for the present moment.
7. The gap area of 5204 to 5323 will act as a strong resistance. This gap getting filled up is the first sign of a bounce.
8. Open Interest points out to support at 5000 levels and resistance at 5200 and 5300 levels.
Strategy for the Week:
Historically for the past few months, the markets bounce towards end of expiry and hence cut shorts around the 5000 levels and be prepared for an expiry around the 5200 - 5300 levels.
Saturday, August 6, 2011
Broad Picture: What the coming months hold for us?
Its been a scenario of doom and gloom all across the world the past week. As the Financial Markets bleed, doomsday predictions are announcing the coming end of the world. Lets see what the future holds for us.
Crystal ball gazing has always been difficult.Some things are apparent now. The US will no longer be the superpower it once was. Its influence is on the wane. It is a gradual process, buy say in about next 20 years it will no longer be as dominant as it once was.
They say every century belongs to a country. Earlier,it was the British who ruled the seven seas on the back of its fleet and industrialization. Before that we had the French and Spanish domination.
Printed paper or currency is losing value. Mindless printing of currency notes has eroded the buying power of the US Dollar. Precious Metals like Gold and Silver are the new safe havens.
Downgrades of US AAA Rating means it would be difficult for US to borrow from the world at the same almost zero interest rates.
Europe is in doldrums of its own. After Greece and Ireland, now Spain and Italy are on the verge of default. The future of Euro is under question.
With the 2 major currencies of the world, the Dollar and Euro having a major question mark against their name, gold emerges as an alternate currency.
Domestically, the car sales are slowing down, the housing sales are down and the economy is slowing down
The tell-tale signs are all there. You have new launches like the Volkswagen Vento being pushed at 6.99 % Interest Rates. We keep getting smses from builders imploring us to buy their flats.
The good part is the sharp drop in oil prices. This means no more fuel hikes in the short term.
Looking at the big picture, the cycles of boom and recession have shortened. India does not get into recessions, since it is a booming economy we experience what is known as a slowdown.
The focus now would be on government policy making to bail us out. If we see good reforms then Indian Markets would do well.
For now, we are firmly in the downtrend. Expect support around Nifty 4800 and Sensex 16000 levels.
That is the time, when we buy good strong companies that have survived precious slow downs and come out stronger. Till then, we wait and bide our time.
Enjoy the Rains and keep buying Gold, Gilt funds and small quantities of good stocks.
Crystal ball gazing has always been difficult.Some things are apparent now. The US will no longer be the superpower it once was. Its influence is on the wane. It is a gradual process, buy say in about next 20 years it will no longer be as dominant as it once was.
They say every century belongs to a country. Earlier,it was the British who ruled the seven seas on the back of its fleet and industrialization. Before that we had the French and Spanish domination.
Printed paper or currency is losing value. Mindless printing of currency notes has eroded the buying power of the US Dollar. Precious Metals like Gold and Silver are the new safe havens.
Downgrades of US AAA Rating means it would be difficult for US to borrow from the world at the same almost zero interest rates.
Europe is in doldrums of its own. After Greece and Ireland, now Spain and Italy are on the verge of default. The future of Euro is under question.
With the 2 major currencies of the world, the Dollar and Euro having a major question mark against their name, gold emerges as an alternate currency.
Domestically, the car sales are slowing down, the housing sales are down and the economy is slowing down
The tell-tale signs are all there. You have new launches like the Volkswagen Vento being pushed at 6.99 % Interest Rates. We keep getting smses from builders imploring us to buy their flats.
The good part is the sharp drop in oil prices. This means no more fuel hikes in the short term.
Looking at the big picture, the cycles of boom and recession have shortened. India does not get into recessions, since it is a booming economy we experience what is known as a slowdown.
The focus now would be on government policy making to bail us out. If we see good reforms then Indian Markets would do well.
For now, we are firmly in the downtrend. Expect support around Nifty 4800 and Sensex 16000 levels.
That is the time, when we buy good strong companies that have survived precious slow downs and come out stronger. Till then, we wait and bide our time.
Enjoy the Rains and keep buying Gold, Gilt funds and small quantities of good stocks.
Sunday, July 31, 2011
Game Changing Week possibly ahead
The coming week is rife with multiple possibilities. The Deadline for US Debt deal is August 2nd and any delay out there could spell doom for the markets. Lets explore all possible Technical and Fundamental Factors.
1. I had a look at the Elliot Waves and they paint a somewhat bleak picture in the near term.
Assuming the rise from 2252 to 6339 was Wave 1 and Wave 2 started in November 2011.
Wave 2 will be sub divided into A, B and C.
Wave A was 6339 - 5177 = 1162 (November beginning to Feb beginning a period of 3 months)
Wave B was 5177 to 5944 (Feb beginning to April end a period of almost 3 months) and Wave C commenced from end of April.
C -1 was 5944 - 5196
C - 2 was 5196 - 5740
C -3 on going
If this is the case then C-3-2 will end soon and the dreaded C -3-3 will start with a massive gap down.
A Wave was about 1200 points so C can be 1200-1800 points giving targets of 4200 and 4800. This will be the buying opportunity of a life time.
2. India Infoline is coming up with Debentures offering up to 11.9 % interest per annum. A small exposure can be considered.
3. Gold is sustaining at new highs. In case of a sharp dip when debt deal gets announced, it would be a buying opportunity.
4. The 5500 - 5700 Range has been broken giving a target of 5300 as first target. 5400 would be a support area and shorts can be covered here and fresh shorts taken on bounces.
5. Event based trading is always difficult and one should always trade hedged.
1. I had a look at the Elliot Waves and they paint a somewhat bleak picture in the near term.
Assuming the rise from 2252 to 6339 was Wave 1 and Wave 2 started in November 2011.
Wave 2 will be sub divided into A, B and C.
Wave A was 6339 - 5177 = 1162 (November beginning to Feb beginning a period of 3 months)
Wave B was 5177 to 5944 (Feb beginning to April end a period of almost 3 months) and Wave C commenced from end of April.
C -1 was 5944 - 5196
C - 2 was 5196 - 5740
C -3 on going
If this is the case then C-3-2 will end soon and the dreaded C -3-3 will start with a massive gap down.
A Wave was about 1200 points so C can be 1200-1800 points giving targets of 4200 and 4800. This will be the buying opportunity of a life time.
2. India Infoline is coming up with Debentures offering up to 11.9 % interest per annum. A small exposure can be considered.
3. Gold is sustaining at new highs. In case of a sharp dip when debt deal gets announced, it would be a buying opportunity.
4. The 5500 - 5700 Range has been broken giving a target of 5300 as first target. 5400 would be a support area and shorts can be covered here and fresh shorts taken on bounces.
5. Event based trading is always difficult and one should always trade hedged.
Sunday, July 24, 2011
Nifty: Technicals for the Week
The Markets ended up 52 points on the Nifty thanks to a stupendous rally on Friday. The coming week is important because RBI policy announcement on Tuesday, then important Results to come, F&O expiry and then US Debt Crisis Resolution. Lets take a bird's eye view about the Technicals.
1. The Markets are still trapped in a range. I see a break out happening above 5700 or below 5500. Till then its a range bound market with a negative bias not withstanding the Friday rally.
2. We run into a the downward trend line joining the tops from 6339 at 5660. We need at least 3 closes above this to declare a breakout.
3. The 200 DMA comes in at 5718. There is a cluster of resistances from 5650-5720 to clear.
.
4. Let us look at Elliot Waves. Assuming,
Wave 1 was 6339 - 5177
Wave 2 A was 5177-5944
Wave 2 B was 5944- 5195
Wave 2 C can be till 5962
This is the alternate count.
Preferred Count is
Wave 1 6339- 5177,
Wave 2 5177-5944,
Wave 3 5944 - 5195 and ongoing which can be subdivided into
Wave 1 5944- 5195, Wave 2 ongoing. This count could be invalidated above 5944.
5. The Standard indicators are all in Downward momentum and its is an Option Writer's market.
6. Looking at fundamentals, I feel this is the last rate hike. Reason is growth is slowing down, Inflation is showing signs of being tamed.Also, I have been noticing that Banks have been very stingy in hiking Fixed Deposit Rates. This means that they expect Rates to come down within next 6 months. The Reverse Repo rate is already at previous highs. The Repo Rate last time went till 9 % and now is at 7.5 % so, we are approaching the end of Rate Hike cycle.
7. The entry into Gilt funds or NCDs of India Infoline at 11-11.5 % Rate of Interest is a good entry point now.
8. Gold has been very bullish and technically is looking awesome on the charts. Buy the dips and year end I feel we could see 1800-2000 dollars.
9. I am confident the Debt Ceiling will be raised soon and there could be an initial breakout or false breakout soon.
Trade hedged and trade light.Expect volatility the next week, and expect some big bang announcement next weekend.
Supports at 5500, Resistance at 5700
1. The Markets are still trapped in a range. I see a break out happening above 5700 or below 5500. Till then its a range bound market with a negative bias not withstanding the Friday rally.
2. We run into a the downward trend line joining the tops from 6339 at 5660. We need at least 3 closes above this to declare a breakout.
3. The 200 DMA comes in at 5718. There is a cluster of resistances from 5650-5720 to clear.
.
4. Let us look at Elliot Waves. Assuming,
Wave 1 was 6339 - 5177
Wave 2 A was 5177-5944
Wave 2 B was 5944- 5195
Wave 2 C can be till 5962
This is the alternate count.
Preferred Count is
Wave 1 6339- 5177,
Wave 2 5177-5944,
Wave 3 5944 - 5195 and ongoing which can be subdivided into
Wave 1 5944- 5195, Wave 2 ongoing. This count could be invalidated above 5944.
5. The Standard indicators are all in Downward momentum and its is an Option Writer's market.
6. Looking at fundamentals, I feel this is the last rate hike. Reason is growth is slowing down, Inflation is showing signs of being tamed.Also, I have been noticing that Banks have been very stingy in hiking Fixed Deposit Rates. This means that they expect Rates to come down within next 6 months. The Reverse Repo rate is already at previous highs. The Repo Rate last time went till 9 % and now is at 7.5 % so, we are approaching the end of Rate Hike cycle.
7. The entry into Gilt funds or NCDs of India Infoline at 11-11.5 % Rate of Interest is a good entry point now.
8. Gold has been very bullish and technically is looking awesome on the charts. Buy the dips and year end I feel we could see 1800-2000 dollars.
9. I am confident the Debt Ceiling will be raised soon and there could be an initial breakout or false breakout soon.
Trade hedged and trade light.Expect volatility the next week, and expect some big bang announcement next weekend.
Supports at 5500, Resistance at 5700
Sunday, July 17, 2011
Gold has given a breakout Technically
A few weeks back, we had uploaded a presentation on Gold. Lets re-visit the presentation and a few short terms pointers.
Gold has given a solid Technical Breakout by Closing above the previous Intra Day high of 1577 dollars, 3 days of the week and on a weekly basis. The next target should be the psychological 1600 USD mark.
The previous top at 1577 dollars will now work as a support.
How do we play Gold from here?
The Rupee has strengthened against the Dollar to Rs 44.54 on the back of the so-called FII inflows. This means that whenever there is a sell off in the markets Gold will rise in rupee terms.
For Gold to rise, even if it remains at current rates in USD terms, the rupee weakening will do the trick.
If we look fundamentally, for Gold things are looking up even more. The European economies continue to flounder, the US will have to go for QE-3 soon.
One should look at Gold as an Investor and continue adding Gold at every dips or when one has some extra cash to put away. 1-2 gms at a time all add up at the end of the day.
Technically, the markets are in a range. Expect the range of 5500- 5650 to break soon, giving targets of 5400 and 5800 on either sides.
The Results are out and the early ones are not too great. Usually, the better results come out earlier.
So, enjoy the rains.
Gold has given a solid Technical Breakout by Closing above the previous Intra Day high of 1577 dollars, 3 days of the week and on a weekly basis. The next target should be the psychological 1600 USD mark.
The previous top at 1577 dollars will now work as a support.
How do we play Gold from here?
The Rupee has strengthened against the Dollar to Rs 44.54 on the back of the so-called FII inflows. This means that whenever there is a sell off in the markets Gold will rise in rupee terms.
For Gold to rise, even if it remains at current rates in USD terms, the rupee weakening will do the trick.
If we look fundamentally, for Gold things are looking up even more. The European economies continue to flounder, the US will have to go for QE-3 soon.
One should look at Gold as an Investor and continue adding Gold at every dips or when one has some extra cash to put away. 1-2 gms at a time all add up at the end of the day.
Technically, the markets are in a range. Expect the range of 5500- 5650 to break soon, giving targets of 5400 and 5800 on either sides.
The Results are out and the early ones are not too great. Usually, the better results come out earlier.
So, enjoy the rains.
Wednesday, June 22, 2011
Gold Presentation
A few days back, Taran Marwah and myself had prepared a presentation on Gold purely looking at the charts. I am adding the presentation below.
The link is as below:
http://groups.google.com/group/nav-files/t/a6e139b52f7dfc1?hl=en
The link is as below:
http://groups.google.com/group/nav-files/t/a6e139b52f7dfc1?hl=en
Saturday, August 7, 2010
Ayn Rand on Gold
I was reading the The Atlas Shrugged by Ayn Rand and came across this piece on Gold which was written by her in 1957.
"Whenever destroyers appear among men, they start by destroying money, for money is man's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of a arbitrary settler of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exists, backed by a gun aimed at those are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs; it is upon the virtue of the victims. Watch for the day when it bounces, marked "Account overdrawn"
This was written almost 53 years ago. An idea whose time has come?
I would strongly recommend Atlas Shrugged and Fountainhead by Ayn Rand. The above words are the most profound I have come across in a very long time.
"Whenever destroyers appear among men, they start by destroying money, for money is man's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of a arbitrary settler of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exists, backed by a gun aimed at those are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs; it is upon the virtue of the victims. Watch for the day when it bounces, marked "Account overdrawn"
This was written almost 53 years ago. An idea whose time has come?
I would strongly recommend Atlas Shrugged and Fountainhead by Ayn Rand. The above words are the most profound I have come across in a very long time.
Saturday, January 23, 2010
Markets: What to expect now?
The last 2 days of the week were pretty bruising and we had a good amount of fall. The fall leads us to question , is the move just corrective or we are beginnig a fresh round of fall.
Points to consider:
1. FIIs have sold 3300 crores in last 3 days and DII have bought 2500 crores. Obviously attempts to hold up the markets.
2. The rally which began from 4944 to 5310 lasted from 21/12 to 06/01.9 days for up move and the down move has taken 12 days. This is a positive for the markets.
3. The trend line joining the lows from July as attached provided support on a weekly basis. This comes to 4972 for the next week. Also, we got support at 100 EMA.
4. The 5 week low EMA has been broken twice since March and once we crossed that previous 2 times we went much higher. This comes to 5051 for the next week. A close above that is positive for the markets.
5. The resistances would come now at 5051, 5110, 5179.
6. The US Markets fell on news of Obama trying to regulate the big banks. This dragged the world markets down. Lets see how this pans out because Obama is in a tight spot now with election losses. regulating big banks always appeals to public sentiment.
Strategy is simple, go long with hedges only if closes above 5051. Also, watch if 4944 breaks and closes below 4972 on weekly basis.
Next week is RBI policy on Jan 29th and NTPC opens its fresh offering on 3rd Feb. Expect supportive noises from the RBI, provided the world markets help.
I would continue to keep adding Gold to my portfolio.
Saturday, October 24, 2009
Critical Week Ahead
The markets hit a high of 5182 on the nifty before closing the week at 4997. This was a very interesting week, and the week that follows will tell us whether the entire rally which started from March is over or just a small dip. There were several differences this week over the previous 7 months.
First, the FIIs were huge sellers on last 3 days. They pulled out almost 1500 crores whereas DIIs pulled out 80 crores. I went back and checked. The DIIs have bee net sellers over August, Sept and Oct. In July they were marginal buyers.
This means the entire rally from July, post budget has been on FII flows. This week FII liquidation could be because of Galleon and Lehman forced liquidation or something else. If it was only a forced liquidation, then we should be ok.
Second, Nifty closed at 4997. The 5 week EMA was at 5000, and it has closed below it. This is only the second time in 7 months it has done so.Hence, for the bull run to continue we should close above 5000 next week. All the max open interest is at 5000 strike price for Oct expiry. So we should be somewhere around this by Thursday with a negative bias as there are more calls than puts written at 5000.
Thirdly, we have closed below 20 EMA from which we have taken support many times. 50 EMA comes at 4853 which becomes a key level to watch. Closing below this level for 3-4 sessions, then all bets are off.
UK recession continues. Longest recession since they started keeping records. In US, the corporate results were better than expected. The main thing is profits have increased but not the sales to the same extent. The increased profits come on the back of cost cutting measures. But you can cut costs only to an extent.
Lets see if the entire upmove from March is over and we begin the next leg of downmove or the uptrend is intact.
Over the longer term, I am bullish on sugar, gold and Telecom (Bharti).
First, the FIIs were huge sellers on last 3 days. They pulled out almost 1500 crores whereas DIIs pulled out 80 crores. I went back and checked. The DIIs have bee net sellers over August, Sept and Oct. In July they were marginal buyers.
This means the entire rally from July, post budget has been on FII flows. This week FII liquidation could be because of Galleon and Lehman forced liquidation or something else. If it was only a forced liquidation, then we should be ok.
Second, Nifty closed at 4997. The 5 week EMA was at 5000, and it has closed below it. This is only the second time in 7 months it has done so.Hence, for the bull run to continue we should close above 5000 next week. All the max open interest is at 5000 strike price for Oct expiry. So we should be somewhere around this by Thursday with a negative bias as there are more calls than puts written at 5000.
Thirdly, we have closed below 20 EMA from which we have taken support many times. 50 EMA comes at 4853 which becomes a key level to watch. Closing below this level for 3-4 sessions, then all bets are off.
UK recession continues. Longest recession since they started keeping records. In US, the corporate results were better than expected. The main thing is profits have increased but not the sales to the same extent. The increased profits come on the back of cost cutting measures. But you can cut costs only to an extent.
Lets see if the entire upmove from March is over and we begin the next leg of downmove or the uptrend is intact.
Over the longer term, I am bullish on sugar, gold and Telecom (Bharti).
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