Jose Koshy's  Instablog

As expected, the Indian stock market (NSE) went to our script and closed up 3.5 %, the index closed at 4850 levels after attempting 4890 levels close to our target of 4950. What is a bit worrying this week is, the volumes were lower on a break out of the range, this does give a feeling of uncertainty at the top. The July IIP nos. a lagging indicator came at 6.8 %, which is surely a good number and keeping the Indian economy on an upward drive. This week also saw the Indian Co’s getting bold while buying out overseas assets, Sterlite increased the bid for Mexico based Asarco, Bharti is keen on the MTN deal and is open to sweetening the offer. Indian Co’s are getting bold and are going shopping aggressively. The public issue of OIL was well accepted with a 33 times over subscription, so there is free flow of money for quality paper.

This week all eyes will be on the corporate advance tax nos. paid on Sept. 15^th, the world will be keenly watching the dumping duty imposed by US on Chinese tires, the US is protecting its economy, but what happens to the free trade ? Is US getting protectionist & socialist? If this is taken to other industries, we may have a run on the $ sooner. The Chinese are scared of holding on to US bonds and have created a $ 300 billion to buy real estate assets in the US. They recently lent money to IMF in Yuan denominated currency, another change from tradition. The world is facing a chance to see a big run on the $, will it happen now or a little later?

The derivative series has seen some good accumulation last week, the derivatives positions for the week stand at Rs 103365 Crs OI, the PCR is at 1.36, the option IVs for Calls at 26 % & Puts at 30%. The derivative & technical indicators suggest, we will see Nifty break down and move to of 4650 levels or even lower.

Stock idea for the week (Long term) : Buy Dhanalakshmi Bank @ Rs 150 levels for a Target of Rs 250 in a year.

Nifty idea of the week: Sell around the 4850 - 4900 levels for a Target of 4650, Stop Loss: 4950