Nifty

#70 Nifty Update

BUMPY NIFTY!!! Today NIFTY opened up positive at 5196 and then made a low around 5124 to close at 5161 plus 88 points. Only 70 points volatility but it moved up-down whole day making investors puzzled of its further move. US FED yesterday announces no change in the interest rate until mid 2013 with Range being 0 to 0.25%. Bernake even mentioned that State of Economy and recession are worst then they even expected. Many analyst say that FED are confused what step to take to control US situation so they remain unchanged to their approach towards bailing out its economy. A report says that US banks are more liquid in position then they were before the 2008 turmoil. A official from BoA- Merrill lynch said that erosion in stock prices won’t affect Banks this time around because they have business in hand. Revenues have increase at a slower pace but they are better than 2008 pre-turmoil. Europe Central Bank has been buying Spain and Italy bonds to save the debt crisis but expert says its temporary relief. EU has to think something unusual to save their economy. Analyzing Indias situation, we are at much better place than other countries. Growth story is still on the mind of government as well as many corporate who are expanding their product line. Firstly, Government has decided to participate in bid for Potash resource in Belarush for worth $6-7billion. Government foresees high demand of fertilizers in near future. Government with many private sector companies will participate in this $30 billion bid with many other countries like Russia and china. This will surely help fertilizers companies such as RCF, Chambal Fertilizer and NFL to diversify their product line so you must have these stocks in portfolio. Secondly, SEBI opened limit of QFI to invest directly in Mutual Fund worth of $13 billion which is a large chunk to liquidate MF industry. This will infuse more money in our economy. Thirdly, RIL are about to launch its first Hotel and Luxury house in JV with East India Hotels (EIH). RIL being a cash rich company it is a good idea to move the company towards conglomerate functionality. Fourthly, RCOM yesterday launch  first ever tablet pc by any service provider with a lowest price bid of rs.12999. This move will give a first mover advantage to RCOM but question arises whether this will help RCOM to reduce its 24450 crore debt??..If people are not aware then RCOM has FCCB redemption next January at a rate of Rs.656/share and currently stock is at 94…how will it repay it such cash crunch situation??..Keeping RCOM FCCB aside we could see even in a turmoil condition India is still having confidence in its growth story and We are not sitting back. Technically speaking RSI and Stochastics has shown some fresh buying to move out of Over Sold zone at 30 levels. As i mentioned a gap at 5230 is unfilled which would be felt in next 2-3 days if supported by Global markets. Weekly Chart has witnessed a hammer which may be a reversal sign. Strategy would be selling on Rise for long term while for short term buy with tgt of 5400.
NIFTY levels for 11th August:-
R-5168                  S-5125
R-5230                  S-5082
R-5280                  S-5050
R-5334                  S-4985

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