Crude prices jumped up to USD 35 as Russia indicated willingness to discuss production cuts with other producers . However given the present global situation this may not work out immediately. The oversupply of Crude remains a practical reality.
US equity markets moved up buoyed by higher Oil prices and excellent results from Facebook and Microsoft .
However for Asian markets it may be a one more day for sliding down .
For Indian markets it may open soft . As we approach the Budget this month , we expect some strong pre budget rally from these levels over this month . Buying 7500 calls may be a good strategy to play this market , without too much downside.
As expected the Fed kept the interest rate unchanged . However they kept their options open to review the situation in March . As the markets had already priced in such a situation the markets sold of after this .
Asian markets are flat for now. We may see more volatility as we approach the Chinese new year . The good news is Oil has stabilized for now above USD 30 .
As we approach NIFTY expiry today expect some action on both sides . These are good levels to go long before the pre budget rally starts.
Rupee however will continue to remain under pressure. We have expect the range of 66 to 69.50 hold for most of this year .
Oil moved above USD 30 , supported by talks among Oil producing nations. Market is also pricing in Fed inaction in the next . Indian markets are expected to open in the green . In may see increased volatility in the 2nd half as we approach the expiry of Jan series tomorrow.
The world is getting flooded with Oil . With Iran coming in there will be more Oil . Thus as demand remains stagnant , supply increases and prices fall . In general low commodities is good for world growth . India being a net importer of Oil and will benefit from this fall in commodity prices .
However too low an Oil price may result in companies defaulting on debt payments . We live in a connected world . So sometimes too much of good turns bad . However for now the fear seems to be more in the mind than in reality .
At some point Oil producers will come together to cut productions before they bleed to death . However one thing is certain . Volatility is here to stay . In days to come we will see tsunamis of hope and despair rocking the markets .
ECB stimulus hopes helped the global markets to move up from their recent lows . It also raises hopes that US Fed will also be more restrained in raising interest rates in the near future .
After all the global economy is still facing strong headwinds . ( Falling Oil prices and China slowdown )
Indian markets are expected to open gap . Hopefully the rally sustains and we may see 7400 on Nifty . As discussed yesterday traders may go long with a target of 7580 or more in the Feb series
The end will come and only then the end is known !
How do we know for sure if a market has bottomed out . Only after the prices move up and we repent that we should have purchased at those prices . Unlike the online discount sales which we are so used to , in stock market the maximum discount that we can get is not revealed in advance .
As we have mentioned in the past the market gyrates between exuberance and despair . Between fear and greed . As of yesterday fear has taken over the market .
So far as the fundamentals are concerned , things are not that bad . We can expect the market to bounce back from these levels. Investors with holding power should enter the market and buy good stocks like SBI , HDFC , TCS and Infosys.
Midcaps has seen a huge sell off , however we may see some residual selling in the coming days .
Traders with deep stop losses should go long at current levels with a target of 7580 and a stop loss of 7150. However these are risky bets with the possibility of higher returns.
Rupee will see some short term strength , but in the long term we will see further weakness . We expect levels close to 70 by March .
China official growth numbers stands at 6.9 % with the fourth quarter growth at 6.8 % . This is in line with broad market expectations and should help the financial markets to recover .
China has also made it clear that they do not intend to start a currency war by devaluing their currency . They have enough room to support their currency .
The major concern on China has been their unpredictable nature of policy actions . However to give the Dragon it's due they are transiting from a controlled economy to a market driven economy .
China being of the size it is the transition has to be slow , with two steps forward and one step backward .
China's shift from a commodity driven economy to a service lead economy is also good for the World . We will have less pollution and consequently less global warming.
As Panic takes over the market , we may see continued sell off . US and EU markets came off sharply on Friday . As Iran Oil enters the international market Oil continues to make new lows .
Also the fear of the unknown called ‘ CHINA’ haunts the market . We may also see margin calls leading to further sell off in the Indian equity markets .
However these are oversold markets and is not entirely fundamental driven .
Long term investors should use such opportunities to add to their portfolio . The following can be added in small lots over this correction . One can expect healthy returns in the next two years .
IT : Infosys
Pharma : Cipla , Sun Pharma
Infrastructure : L&T
FMCG : HLL , P&G
Trades with enough risk appetite may build small long positions on Feb . The market after today's sell off may see some relief rally .
I wish there was some easy steps to catch a knife . Unfortunately there is none .
Everyone should not try to catch a falling knife . It required practice , experience , concentration and above all self control . Control over one’s emotions . Control over fear of impending destruction.
US markets crashed yesterday . Asian markets are also falling . On India , NIFTY will break the support levels of 7500 . The next support will be at 7430 levels . It may even move lower ! Yesterday the market was extremely volatile . We can expect similar whipsaw movements today . Such movements will break all stop losses for day traders and push them out . Thus traders with a lot of risk appetite and deep stop losses can only play this market . Too tight stops which does not factor in increases volatility comes with the guarantee of capital erosion .
So should we liquidate all investments and run for cover . Should we average down. Should we pick and choose good investments and invest . Above all should we get anxious or sad .
It will depend on what we are comfortable with. In the long term these levels are good. So enter the market on the long side if you can sleep in peace even if market falls by another 25 % . For others wait and watch till the dust settles.
We expect Asian markets to recover today . India is also expected to open in the green . However as Oil continues to go down , we may see the market recovery being short lived .
As of now expect volatility to increase over the next few months .
NIFTY traders may remain long with 7500 as stop loss and a target of 7700.
INR long term trend remains weak , however it may firm up a bit today . This will be a good time to cover Dollar short positions.
Markets are driven by fear and greed . We all ‘wish’ to buy low and sell high .Unfortunately most of the small investors are driven by market headlines .
The market falls and suddenly all the optimism vanishes. The market expects who predicted that we are in an one way bull run are nowhere to be seen . A new set of experts predicts doomsday , Oil is falling , China is crumbling , sell all shares , run for cover !
However we can make money only if we take a balanced view of the market . Only if we could control fear and greed!
China slowdown : This is a well know fact and nothing new . The market is scared on the extent of slowdown . However we should keep in mind , China continues to grow much faster than the developed nations . It has entered a different phase of growth . It's good for the world at large that China has decided to slow down . We have lower commodity prices and less world pollution as a result .
Commodity prices fall : It had to happen in any case . We have been suggesting our readers to exit commodity stocks. High commodity prices has forced the world to be less dependent on commodities . We have a less commodity intensive growth going forward. The indian Jute industry dies . Railroad industry died and so did Typewriters. Did the world crumble because of that .
Companies that fail to evolve dies . Same with industries .
So there we are in the grip of fear . Thirty days back it was greed.
For long term investors this is a great market to build their portfolio . For short term traders go long as the market looks oversold. NIFTY has strong support at 7500 and resistance at 7800 .
So happy shopping for all of you !! Buy what you always wanted to buy !
India being a net importer of commodities should benefit from this fall. It allows India an opportunity window to build its infrastructure at a lower cost .
2. The dream that is encapsulated in ‘ Mody’ : The political change over with Mody coming to power was a dream come true. The nation was tired of slow growth , corruption and stagnation . The market rallied in anticipation as political change swept through the country . Going forward one thing is clear , Indians want growth , better lifestyle , healthcare and infrastructure . Any government that fails to deliver on this will be voted out . Thus we saw a new impetus to growth and development .
3. A mature financial and legal system : Amongst the developing nations India provides one of the most mature financial and legal system . With the bankruptcy laws and other legal and procedural reforms , FDI will have a more transparent entry and exit option in India . India can also boast of an Independent legal system which provides protection to investors.
4. Growing middle class and domestic market : India have a huge growing middle class. This provides the much needed domestic consumption led growth . As exports suffer due to global turmoil , this provides the much needed downside protection for manufacturing sector.
As the benefits of development filters down the society we will see a surge in demand from the growing middle class.
The concern over slowdown in China continues to torment the financial markets . Indian equity markets may try to open in the green . However we can expect the market to remain range bound with a downward bias.
In general a wait and watch approach will be appropriate for cautious investors. As volatility increases we have to use options to hedge our positions . We will discuss capital preservation strategies with participation in the upside in our Friday newsletter .
The new year started on a cautious note . We saw major sell off across financial markets . The major factors that will shape the direction of the market for 2016 are as follows :
So far as India equity market is concerned apart from the global factors the local factors that will be closely watched are :
After the massive fall of yesterday , markets are expected to open on the positive note . Short term traders may cover their shorts .
Indian markets to open weak in line with other Asian markets .
As volumes improve the next few days will be very crucial for the market . NIFTY will have a strong resistance at 8000 and support at 7700 . In case 7700 breaks we can come close to 7500 levels .
For investors looking for safe investments with a two to three years time horizon Castrol , Infosys , Tata Chemicals looks good .
So far as day traders is concerned short NIFTY with a target of 7700 and stop loss of 8030
Happy new year to all of us !
How to welcome 2016 !
From this year I will learn one foreign language every year !!
Yes this was my new year resolution some fifteen years back .
So how many foreign language have I mastered since then ? No marks for guessing the right answer ! Not that I never meant it .
Many of our new year resolutions are like this . Why just new year ? Many of our promises in life are like this.
We all want to be good. We want to be the best . The topper in class . The best job . The most healthy .
We wish to be the the best of everything , Singer , Painter …... Son , Lover , Husband, Father and Grand dads.
Every year we make new year resolutions . The promises that we make to ourselves . Lofty ideas on self improvement . They are too demanding . They do not take into consideration the ‘cost’ of achieving the same.
But then as we keep trying we get exhausted .Our motivation wanes off . The muscles of our willpower gives up . Then we keep giving up . Again and Again . We get used to giving up .
We convince ourselves that we are too weak to stick to our plans . And then we give up planning .
One of my friends told me how difficult it is to quit smoking . he said he has ‘given up’ smoking for five times only to give in later on . The longest period he could quit smoking was 14 months .
But after fourteen months of struggle he gave up . It's like going to the gym and lifting weights. Its like starting with 50 Kg on your first lift.
Then how to stick to our new year resolutions. The trick lies in knowing ourselves . Most of the times we assume our motivation will take us through . Many a times we fail because we make the wrong promises to ourselves . Someone who has never lifted heavy weights cannot start with 100 Kg on day one .
Same for our mind. So the steps to ensure that we can stick to at least some of the new year resolutions are as follows :
This applies to any goals that you man to set for yourself . It can be financial or nonfinancial .
Thus the resolution to learn a new language every year , translates to learning nine words of that language every day .
Achieving freedom from debt trap becomes saving on the extra coffee and wasted groceries every day .
Write to us about your new year resolutions and how you plan to achieve the same .
Once again a very happy new year to all of you !
The last trading day of the year may not be that exciting . As most of the market participants are on holidays , volumes are very thin. US and EU markets drifted down on low volumes .
Indian equity market may also continue to move sideways with a downward bias. As mentioned in our yesterday's analysis the market is close to some strong resistance levels.
A very Happy new year to all our friends ! Thanks for supporting us in 2015 ! In 2016 together we will try to make 9Rupee more useful . Our effort is to save your time and effort in understanding the financial markets.
As we prepare to welcome 2016 let's look at sectors and their prospects in 2016 . We will endeavour to cover most of the major sectors and their outlook for 2016 in the next few days . If you want us to cover any particular sector , please write to us with your queries .
Yesterday US and EU markets moved up . There seems to be some bottoming out of Oil prices .
Indian Equity market may trade sideways for now.
The market is nearing some strong resistance at 8000 Levels . However the good news is that the market has held on to its recent gains defying all bad news.
Rupee may see some weakening in the next few days against USD.