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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 - 31st August - 5th Sept 2009 0 comments
    Aug 30, 2009 10:27 AM | about stocks: INFY, IFN, EEM, WIT, TTM, IBN, HDB
    As expected, the Indian stock market (NSE) moved upwards and very close to the target set @ 4780. The Indian Markets closed at 4730 levels for the week. India was one of the outperforming markets in the world with a 4.5 % up move this week closely followed by Russia. The rest of the markets were flat for the week. India had derivative settlement, which may have prompted the shorts to be covered giving an impetus to the rally last week. We have two sets of staunch believers, one camp saying the rally will continue and the other, we will fall! So the bull’s and bears seem to be fighting it out on a global basis. Last week saw some major announcement on the export policy in India with an ambitious target of $200B in 2010 – 11. With the global economy in disarray, only time will tell if we get closer there, I would think, we will be far from it. This week also saw the Core sector growth index slip to 1.8 %, which is below the 4 % growth recorded in June. So was June IIP nos. of 7.8 % growth an aberration? The Reliance brothers ‘Soap Opera’ now moves to Oct 20th, 2009, when the SC will decide on the case, in the mean while the trading volumes of the Reliance group Co’s have dropped by 40 % in the last 3 months, so the trading community clearly is moving away from punting in their stocks. On the global markets, the Europe consumer confidence levels are at a years High, so is this ‘Stimulus’ induced ‘High’ or can be sustained? What happens when the global economy goes around selling these debts and stops the stimulus? This is not far away!
    This week India will see a slew of no’s from cement & auto co’s, the markets are discounting the 20 % growth in auto sector. The auto sector is one of the few sectors where the market cap of Co’s like Maruti, M&M & Telco have moved up > 200 % in the last 52 weeks. We will continue to see out performance in this sector. The Oil India IPO is slated to open on Sept. 7th’ 2009, so will the government & merchant bankers manage to manage the markets by keeping the upward momentum going for another week? I would think a side ways move is what they will be able to manage. The global markets are discounting all the good news and moving in a narrow range, this can be seen as a topping or exhausted feel to the markets. The US traders resume after the summer vacation on 31st August, so will they all come and Sell into September? If history is a gauge..that is exactly what they will do !
    The derivative series has just started, and is tough to gauge them to know the direction. As of now, the Bulls n Bears are on even keel, looking at the Cost of carry and roll over, the Bulls have confidently rolled over the positions with the Bears covering their shorts on settlement. Brace for a tough trading week with huge whipsaws,  The derivatives for the week stand at Rs 73293 Crs OI, the PCR is at 1.20, the option IVs for Calls at 32 % & Puts at 35%. The technical indicators suggest, we are at Resistance levels for Nifty around the 4350 – 80 levels.
    Stock idea for the week (Long term) : Buy Jain Irrigation @ 650 levels for a Target of Rs 900 in a year.
    Nifty idea of the week: Do not Trade…Whipsaw…Whipsaw!
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