Thought for the day
"In a country well governed, poverty
is something to be ashamed of. In a country badly governed, wealth is something
to be ashamed of."
-
Confucius (Chinese, 551-479BC)
Word for the day
Rhapsodic (adj)
Extravagantly enthusiastic; ecstatic.
(Source: Dictionary.com)
Malice towards none
Indians are drinking more and young.
The abortion rate amongst Indian teens is rising at alarming pace.
Tell me the catalysts for these trends.
I mean besides, item numbers, item girls, Maggie Noodles, and denim
trousers!
NIFTY: Constrained by a long leash
Technically speaking, the Indian equity markets are positioned
at interesting juncture from near term as well as short term perspective.
Near Term (1 to 36 trading sessions)
In the near term NIFTY is close to completing a reverse head
shoulder pattern (H&S) (see chart on next page). It has also made a higher
bottom, suggesting buying support above 8050 level.
A close above 8325 will conform the H&S breakout and will
open the way for up move till short term resistance range of 8550-8630.
On the other hand a close below 8120 will negate the H&S
formation and trigger a move towards short term support of 7860.
The most likely scenario in my view is that NIFTY may complete
H&S pattern breaking 8325 this week and making a move towards 8550 level in
next 3-18 trading sessions.
Short term (1 to 108 trading sessions)
In the short term NIFTY appears to be established in a downward
slopping channel. The current bounds of this channel are 8630-7860.
Three consecutive close outside these bounds will violate the
trend and open the gate for a 7% NIFTY move in the following 1 to 42 trading
sessions. This scenario looks less likely as on date.
Medium term (108 to 324 trading sessions)
The medium term uptrend has been violated and must take some
time get re-established.
As per current trend the medium term NIFTY range is 7860-9450.
Failure to close above 8630 in next 54 trading sessions will move the range
lower to 7200-8320. However, three consecutive close above 8630 in next 54
trading sessions will sustain NIFTY in the current range.
At present, the chances of breaking this range are miniscule.
Nifty: Near Term uptrend likely
Selling pressure recedes, breadth
better, IV higher but moderate
Global Markets Last Week
Fed, data take center stage
Investors will watch for any
change in the economic outlook from housing data and remarks by various Federal
Reserve speakers next week, while retailers will take over on the earnings
front as the first-quarter reporting season trickles to its end.
The highlight comes at the
end of the week with Fed Chair Janet Yellen speaking on the economic outlook on
Friday. Any hint of a downgrade to the economy could signal a delay in monetary
policy tightening; central bank watchers now expect the Fed to begin raising
interest rates in September.
Yellen will be preceded by
Chicago Fed President Charles Evans, who will talk about policy on Monday and Wednesday
in Europe. The San Francisco Fed's John Williams takes his turn on Thursday, a
day after minutes of the Fed’s April meeting are due.
Yellen signaled earlier this
year that the Fed will likely start raising borrowing costs later this year,
even before inflation and wages have returned to normal levels.
"From Yellen, markets
want to know whether or not she continues with that direction," said
Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
"Any color that you can give to the debate on expectations for liftoff
will certainly be picked up by the market." (Reuters)
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