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 Week Ahead -1st - 6th Feb 2010 0 comments
    Jan 31, 2010 7:22 AM | about stocks: IFN, EEM, INFY, WIT, HDB, IBN, TTM
    The Indian market continued the correction by falling another 3 %, the settlement caught the bottom fishing traders back again and there by a huge sell off on Thursday & Friday, the late recovery of Friday by as much as 2 % may be a sign of a short term bottom. The RBI came out with a 75 basis points increase on CRR, a very welcome step to curtail inflation without affecting liquidity in a big way. Despite this increase, the cash in the market will be to the tune of Rs 45000 crs. Banks have been under stress as the lending has been slowing down in the last 3 months. The interest rate may not go up in a hurry as the banks are flushed with funds and the lending slowing at a fast pace. The food inflation is at a high of 17.4 %, which is a huge case for worry. With increasing population and improving lifestyle, if the government does not address this, can cause huge panic. The other side of industrialization is lack of farming so a huge threat to food security. The government needs to address the issue of food security sooner.
    This week, we must get a bounce back from a technical side; the markets will look up to the US budget on 1st Feb. The US markets have fallen despite a 5.7 % GDP growth in Q4. So the good news seems to be getting discounted. The January auto, cement nos. etc should come stronger than expected in India but the overhang of the Budget by end Feb will weigh heavily on the market as we move the month. The government will start pulling the plug off on the stimulus there by affecting the short term up moves, it must affect all sectors especially Auto’s, finance & commodities.The government will prop the LIC & other government funds to manage the markets till the NTPC & REC follow up offer is done by early February. All the up moves in the markets are to be sold rather than brought.

    The derivative series has seen some good roll over to the new series, the derivatives positions for the week stand at Rs 93000 Crs OI; the PCR is at 1.15 the option IVs for Calls at 25 % & Puts at 27%. The fear has slowly creeping into the markets; we must see volatile sessions ahead. This is also the first time the start a new derivative series is seeing OI of > 90000 Crs.
    Nifty on 29th Jan: 4882
    For the week: Sell Nifty @ 4980 - 5020 for a target of 4720, in 2 – 3 weeks. (Do not try buying the Nifty for a 100 point up move from present, is prudent to short while it moves up)
    Stocks: IFN, EEM, INFY, WIT, HDB, IBN, TTM
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