Archives : ANOTHER RATE CUT ??? - 13/02/2009.

ANOTHER RATE CUT ??? – 13/02/2009.

First of all, let me wish you all a very Happy Valentine Day. I know the mood is down as the Bulls have taken a back seat since the past year. But one should not lose hope as the market keeps on springing surprise after surprise. Who know what may be in store for us in the interim budget being presented on Monday, may be some Valentine gift may be lurking in there!

 

At last the market gave an upward breakout after consolidating in a narrow range. The trading range was getting narrower by the day and thus the breakout had to occur. Both the indices have managed a close above their resistance levels.

 
  • Rail Budget.
  • MIXED SET OF ECONOMIC DATA.
  • REMOVAL OF S.T.T.?
  • SENSEX.
  • NIFTY.
  • LAST WEEK’S RECOMMEDATIONS:
  • THIS WEEK’S RECOMMENDATIONS:
  •  
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ANOTHER RATE CUT ??? – 13/02/2009. 

First of all, let me wish you all a very Happy Valentine Day. I know the mood is down as the Bulls have taken a back seat since the past year. But one should not lose hope as the market keeps on springing surprise after surprise. Who know what may be in store for us in the interim budget being presented on Monday, may be some Valentine gift may be lurking in there!

 

At last the market gave an upward breakout after consolidating in a narrow range. The trading range was getting narrower by the day and thus the breakout had to occur. Both the indices have managed a close above their resistance levels.

Rail Budget.

The Railway budget presented on Friday, was pedestrian by nature. As expected the bunch of stocks associated with the rail budget, rallied prior to the budget and came down after the budget. Now the market looks forward to the interim budget on Monday. One needs to be careful as the short term upward rally may fizzle out soon and give way to the medium term downtrend. So my advice is to trade in small quantity and use hedging strategies.

MIXED SET OF ECONOMIC DATA.

The December IIP nos. came in at -2% v/s +1.7% in November. The slowdown was expected but not to the extent of being negative. This was only the second time in last 15 years (last time being in October 2008) that the IIP nos. had declined to negative. Some good news was in the Inflation figures which came in lower at 4.39%. This steep fall in inflation can be attributed to the fuel price cut.

The government will need to act and the RBI will have to cut Interest Rates further so as to boost the sagging Industrial Output. Since Inflation is on a way down probably to 3% by the end of February, the RBI will have no hesitancy in cutting the Interest Rates further.

REMOVAL OF S.T.T.?

One of the big positive surprise, the government can gift to the stock market in the interim budget, will be removing the S.T.T. The scraping of S.T.T will breathe some life in the stock market. Since the trading activity is already down and so is the collection of S.T.T., it may turn out to be a good move to remove S.T.T. The market may cheer for a while and may go up for a couple of days but, that will not change the overall long term Bearishness in the market.

SENSEX.

Sensex opened the week at 9359, made a high of 9724, made a low of 9329, and closed the week at 9634, thus registering a weekly gain of 334 points.The Sensex has run away living a Bullish Breakaway gap between 9321-9329. This gap will act as a support in any fall.The MACD indicator which had already given a Buy signal has turned positive. The momentum indicator like RSI is at 56 and pointing upwards, thus suggesting further gain in momentum.The Sensex has given a Bullish Inverted Head & Shoulder breakout at the start of the week and the targets for the pattern formation are 9843-10245.The Trendline Resistance is at 10174-10418 and Trendline Support is at 9353-8874.For the week ahead the Resistance is at 9843-10093-10174-10245. Support is at 9434-9329-9017-8874.

NIFTY.

Nifty opened the week at 2843, made a high of 2969, low of 2840, and closed the week at 2948. The weekly gain was 105 points.The Nifty has registered a big white candle on the weekly charts which is engulfing the previous week’s body. The MACD continues to give Buy signal and is now in the positive territory. The momentum indicator like RSI is pointing upwards and is above 56, suggesting continued momentum in the week ahead.The Nifty has given a Bullish Head & Shoulders Breakout and the targets for the pattern are 3006-3091.The O.I.PCR is quite healthy at 1.37 suggesting a bullish undertone in the market.The Nifty has Trendline Resistance at 3086-3137. The Trendline Support is at 2835-2766. For the week ahead, the Resistance is at 3006-3046-3091-3137. Support is at 2876-2835-2752.

LAST WEEK’S RECOMMEDATIONS:

Once again almost all out targets were achieved with ease. The exception was Sesa Goa which missed the target just by a couple of rupees.
  • BUY RIL 1344 TGT was 1409 Reached 1414.
  • BUY JINDAL STEEL 1074 TGT was1112 Reached 1123.
  • BUY IOC 442 TGT was 449 Reached 457.
  • BUY SAIL 87 TGT was 92 Reached 92.
  • BUY SESA GOA 98 TGT was 105 Reached 103.
THIS WEEK’S RECOMMENDATIONS:
  • Buy Jindal Steel 1089 SL 1056 Tgt 1138-1160-1191.
  • Buy Oracle Finance 681 SL 639 Tgt 709-738-777.
  • Buy SBI 1195 SL 1181 Tgt 1222-1253-1278.
  • Buy Sun TV 172 SL 167 Tgt 178-190-202.
  • Buy JSW Steel 232 SL 224 Tgt 245-252-263.
Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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