Monday, November 23, 2015

Nifty: Rajan-Modi rally under threat

Thought for the day
"The formula 'Two and two make five' is not without its attractions."
Fyodor Dostoyevsky (Russian, 1821-1881)
Word for the day
Devour (v)
To consume destructively, recklessly, or wantonly
(Source: Dictionary.com)
Malice towards none
With rise of two "sons" in the east, will the debate over dynastic politics in India go to slumber?
First random thought this morning
When Arvind Kejriwal hugged Lalu Prasad Yadav everyone commented that political baptism of Arvind Kejriwal is now complete. He has learned all the rules of the game and also decided to play the "game" by the rules.
The people who supported "the change" with great expectations appear distraught and deeply dismayed. But the problem is that these very people were neither happy when he refused to learn the rules of the game and declined to play the game by the established rules.

Nifty: Rajan-Modi rally under threat

The current bull market in Indian equities that started with change of guards at RBI in September 2013 and gathered more pace with change of government at the center is under serious threat of termination.
Nifty flirted with the lower bound of the rising trend line last week and barely survived. The upper bound in the meanwhile is declining sharply.
Traders should watch for the closing low of last week (7731 on Nifty) carefully. A close below that level may indicate termination of the rally that started with a series of fiscal and monetary reforms and consequent improvement in macro indicators. The hope created by the change in regime at the center fueled the rally adequately.
A close below 7660 may trigger a short term bear market in Indian equities and hence would be a shorting opportunity.
The premise does not change until Nifty manages to close above 8330 in a sustainable manner.
I would hedge all my long positions. Hold short positions with a strict stop loss of 8036, and initiate aggressive fresh shorts below 7660 Nifty close level
 
 

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