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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 - Week ahead - 24th - 30th August 2009 0 comments
    Aug 23, 2009 10:49 PM | about stocks: INFY, WIT, IFN, EEM, HDB, IBN, SAY
    As expected, the Indian stock market (NSE) moved sideways with a – Ve bias and did go lower to 4350 levels. This week markets moved to global cues rather than any local cues, so we had China gyrating in an over heated market, which dropped > 20 % at one point. The fear of China pulling down the global stock markets is a fear that most analyst have in their mind. The market ‘talks’ were the Chinese govt. wants to cool the markets and have not supported the falling markets. Thus we saw some sharp pull backs from the lows there. We have the Reliance sibling rivalry now getting media rating that can put some TV soaps to shame, I guess, it is excitement to know what is happening to 7 % of India’s GDP (Combined business of both the groups). The monsoon this week has seen some good improvement. We had just 2 % deficit vs. 56 % deficit last week. The US indices have been trading this summer in a range, and the ‘Green Shoots’ debate and improvement in over all conditions is getting louder. The business confidence index has shot up last week, so has the manufacturing index. But there are other red flags that are slowly showing up, the    unemployment index is not showing sharp spikes nor are the unabated foreclosures of loans. The latest data shows loan defaults have started at the ‘prime’ customer levels. What would happen to the global economy & markets once the $ 2 Trillion stimulus based move is exhausted?
    This week all eyes will be on the $ 109 billion debt sale, the US needs to sell the $ 1.4 Trillion in debt in the next 8 months. The US is expecting the exporters and emerging markets to come and buy all of it. Time will tell how this will be funded without any tectonic shift in the global economy. This week also has the ‘Cash for clunkers’ scheme coming to an end in the US, this has been a huge success and have pushed up auto sales this month. Another free cash scheme comes to an end. What next?
    In India, this week all eyes will be on the monsoon progress & the derivative settlement.
    The derivative indicators tells us, we will move up to a strong close this week,  The derivatives for the week stand at Rs 89422 Crs OI, the PCR is at 1.09, the option IVs for Calls at 32 % & Puts at 36 %. So brace for an upward movement this week. The technical levels indicate, we may see supports at 4480 with overhead resistance at 4640 – 4730 for the Nifty.
    Stock idea for the week (Long term) : Buy Rolta @ 160 levels for a Target of Rs 300 in a year.
    Nifty idea of the week: Buy Nifty @ 4520 – 580 for a target of 4780 (Stop Loss: 4450).
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