Sensex Technical View :
Yet another day with not much activity and its good if it stays so and finds a footing. In extreme short term Sensex could trigger some positivity once it can cross above 10800 and 3350 on Nifty could be corresponding level. Although a trend change could be seen only above 11900 and 3650. So till then the volatility could remain high and sustaining a bottom for 3-5 sessions minimum could generate a pullback.
Stocks to watchout for :
LIC housing is coming close to 210-220 zone which if breaks could crack badly if it doesnt expect yet another bounce. Bharti not ready to fall . Nalco also nearing tgts.
BHEL has reached the target zones and could be an investment buy closer to 1000-950 zones.
Aban Offshore seems to be bottoming around and could see a bounce if crosses 1170 could tgt 1300 after which 1500.
JSW steel seems oversold and could see a bounce back if sustains the recent low of 240 .Above 280 could see 310-350 levels also.
KOTAK Mahindra Bank below 390 could see a drop to 320-350 quickly…. Traders can keep a watch .. Above 500 could be a different thing altogether.
Sunday Thoughts :
RBI , Fed , Sebi , opec and many other bodies, govts from US,India , Europe have continued to take steps to avert the financial crisis surrounding the world. But in spite of the steps financial markets have continued to remain under pressure or rather gone down heavily. Although my economic understanding wont give me much idea on whether the steps are good or not but seem to be in right direction. There is one thing all technical analyst assume is ” Markets are Supreme” . So we would prefer a price-disovery by markets themselves then by external means and that precisely could be the reason why markets have not responded positively to FED cuts, crr cuts , bailouts…
Similarly if we remember RBI tried to hike CRR all through 2007-2008 to reduce the pace. P-note ban by Sebi and other steps could not stop the running market. Also OPEC tried its best to stop crude price run but still it kept shooting. But after a gap of time market discovers the exact pricing and we saw Sensex breakdown quickly , Crude falling sharply.
Generally what happens is the first step may see a good pull but every next step may lead to uncertainty and much more fall. Like on p-note ban markets hit lower circuit but recovered and hit new highs. Similarly we saw a good pull up after say bailout CRR , fed cut etc but made a new low. There have been many steps being taken by fed, rbi , sebi and yet again i may not be a best juge but i believe they are running out of any more steps left.
Although many street people may be tensed that govts, rbi,sebi , fed are not having many lifelines or aces in their hand to stop the financial markets turmoil but i believe they are more focussed towards liquidity,inflation , money flow and other economic turmoils which are seeing some effect.
Somehow as an analogy to last so many critical events it seems markets could create a pullback when the external interventions stop or reduce. It does seem we have seen most of interventions in near term unless there is a much bigger problem which surfaces out of thin air . Price discovery by markets are always better and are not short-lived !!! and it doesnt seem far !!!
( RBI repo rate cut done so not much cuts left , FED cuts done maybe another stimulus package , SEBI only thing left is short-selling ban which every other govt has exhausted , Indian govt hasnt used bailouts which if not done would imply better economic strength ….. Data suggests we are nearing the end of major economic steps for the near term ! )