Thought for the day
"I had therefore to remove knowledge,
in order to make room for belief."
—Immanuel Kant (German, 1724-1804)
Word for the day
Jimjams (n)
Extreme nervousness; jitters
Malice towards none
100miles from Delhi a real seditionist encroaches 280acres
of Indian territory and uses it to launch a battle against the State.
Someone did it in 1984 also. Haven't we learned any lesson
from the killings of thousands of innocent lives then?
Could central government be absolved on the plea that it's
a State subject?
First random thought this morning
A street dog warned me yesterday evening that FOMC meeting next
week and UK vote on EU membership the following week, pose significant risk to
the global equity markets. The trading data suggests that very few have sold so
far. Most traders are perhaps waiting to sell later this week, just ahead of
the event. I am curious to know whom do they plan to sell and why would that
someone be willing to buy when everyone is selling!!!
Strong rallies in gold and treasuries, and weaker USD are not
corroborating a Fed hike or Brexit, either.
Nifty:
Bull market confirmed, many questions unanswered
The new bull market in Indian equities is confirmed. The long term
trajectory is also confirmed (100% gains in 3-4years).
But the rally is confounding and leaves many questions.
Usually bull markets begin from a "cheap" valuation
point and is led by a new leader. Past two bull markets (May 2003-December 2007
and Jan 2011-Mar 2015) started from a low valuation point and were clearly led
by Credit and Domestic Consumption respectively.
This is not the case this time. The markets are trading close to
their long term average valuations. There is no clear sectoral leadership
merging. Most sectors have almost equal number of gainers and losers. The
universal gainers like Sugar, Chemicals are too small to lead the rally.
There is no great divergence between performance of benchmark
indices and broader markets.
The traders and investors may not be trading or investing with
high conviction unless the questions of valuation comfort and leadership are
answered.
In the meantime, in strict technical sense, Nifty faces immediate
resistance at 8330 level and a very strong resistance in 8550-8570 range. On
the downside 7860-7930 has developed as a strong weekly support zone.
Expect Nifty to move in larger 7930-8330 range this week. The weekly range
for Bank Nifty could be even higher at 16900-18000.
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