Jose Koshy's  Instablog

Jose Koshy
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Have been trading n investing in the Indian stock market for 20+ years, has been my hobby to track markets and predict based on fundamental and technical models.
  • India - The Week ahead - 20th - 26th July 2009 0 comments
    Jul 19, 2009 3:35 AM | about stocks: IFN, EEM, INFY, WIT, TTM, IBN, HDB

    The Indian stock market last week went up by 9 %, this was against my views. The rally was driven mainly by the better than expected results across the world especially Goldman Sacs, JP Morgan, Google etc. Also aiding the move was the $ weakening and monies finding its way to commodities & emerging markets. So RISK is back. In India too, the noises on disinvestment and infra spending has excited the markets back again. Last weeks rally has foxed many of the analysts including me. But markets always have this trait of going against the normal, and market efficiency will set in sooner. I continue to believe, we are not out of the woods as yet. If history is to be believed, any slowdown normally last for 30 – 36 months, so we are just a little over 21 months, so we have some more pain to go before we call the ‘Green Shoots’. The Bank Am results, do tell us that the Credit card debts are increasing, so are the default rates. With CIT on the verge of bankruptcy, where will the SMB / small retailers go for cash ?

    This week the focus will continue to be on earnings. In the US markets, we have Microsoft, Caterpillar, Yahoo announcing results and in India we have Reliance , Wipro, Maruti etc announcing the results. This week, all eyes will also be on the Supreme Court hearing of the RIL – RNRL saga with government throwing in their hat. The govt. plans to borrow $ 100 B in this fiscal, this is extremely inflationary and will squeeze all the available liquidity in the markets. We will see the interest rates hardening. My personal feel is, the markets seem to have extrapolated good results across the world during last week. So we going higher seem to be in doubt. We may have sideways consolidation with a –Ve bias.

    On the derivatives indicators, we are at Rs 85K Crores Open Interest and the PCR is at 1.16, implied volatility on calls is at 32 % & puts at 36 %. We may be in for a sideways consolidation with a – ve bias. The short term technical indicators are oversold, so a correction may be due. The levels to watch on the downside are 4265 – 4150 – 4050 – 3900. On the Upside, watch out for 4480 – 4560 – 4700 levels. Trading > 4400 on the open of week will favor the bulls, trading < 4380 on open will favor the bears. Be a level based player.


    Stocks: IFN, EEM, INFY, WIT, TTM, IBN, HDB
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