First random thought this morning
Various TV channels and newspapers carried elaborate debates and
presentations on the performance of the incumbent government in past 2years. I
found nothing convincing.
The people arguing for the government sounded like class 2
students who has just learnt the table of 2. The people against mostly
rhetorical and blabbered non-sense. None offered any solution or constructive
suggestion.
Thought for the day
"In law a man is guilty when he
violates the rights of others. In ethics he is guilty if he only thinks of
doing so."
—Immanuel Kant (German, 1724-1804)
Word for the day
Fard (v)
To apply cosmetics to (the
face)
Malice towards none
Why the second term for governor Rajan is a matter of
debate?
To be fair, the government has not only let him complete
his term but also extended full support by allowing him to pursue his agenda
and design for the Indian financial system.
The government, which is ultimately accountable to the
people of the country, should be freely allowed to find a better person, if
they could, for the job.
As I expected (see
here), the market belied the conventional wisdom trend "Sell in May
and go away", and is already higher by ~4% from April's closing. However,
despite this smart outperformance, the market lacks sufficient momentum needed
to make a decisive directional move.
For now the market has successfully averted any chance of a sharp
correction and 7490 on Nifty seems to be a confirmed cyclical bottom. I may
therefore reiterate that the cyclical top target may occur around 13400 level
before August 2019, i.e., 39months after May 2016.
There are enough signs of a bull market developing. The
outperformance of the large cap is a typical first phase of any sustainable
bull market.
The poor volumes and persistently low volatility suggest that for
now the rally may not be consistent and we may witness many more sessions of
higher intraday volatility. Any sharp dip in next 8weeks will be a good
opportunity to create leverage positions with 6months perspective.
This week Nifty faces strong resistance in 8260-8330 range and
would have equally strong support in 7860-7930 range.
Bank Nifty looks good for the target of 18K+, with a strong support at
16860 level.
Next issue of Morning Trekk will be Published on Monday, 06 June 2016.
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