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Weekly Wrap : - 01 Sept , 2008

By Abhishek on 10:36 PM

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Market Review 

Indian Market Ended with a positive note on Friday as well as on week - on - week basis.   A surprising decline in Crude and Inflation prices also helped market to inched up.  Last week Inflation came down to 12.40 %  ( a decline of 0.23%) compared to its previous week data of 12.63% as a expectation of 12.78 % of market.  Friday , GDP data also came in market , GDP came at 7.9%  in  its Q1 ( FY 2008 - 2009 )  it fell below to 8% when compared to last 9 quarters. Surprising the before the damage of GUSTOV  also it cannot lift the prices of Crude Oil . On last trading day Crude fell $0.13 and finally settled @ $115.46. Gustov will damages the oil rigs ,, and maximum Oil Rigs in North America is on shut down to minimise the loss due to the Gustov. Hike in Oil prices cannot be ruled out due to this  "Mother of all Stroms " . 

Indian market Friday closing shows a positive short covering in Indian Market. On week on week basis the Broader Index  50 share NSE Nifty closed at 4360.42 , up by 32.55 points or 0.75% and the benchmark index 30 share BSE SENEX closes at 14,564.53 up by 163.04 points or 1.13% . In Nifty 4200 act as a major support , and if this level breaches we can see a level of 4152 on NIFTY . On higher side we can face resistance at 4465 or even 4520 levels also. In Sensex 13745 will act as a major support area.  Breaching of this will take back to more lower side.  Some relief was seen in Interest - rates sensitive stock on  announcement of positive Inflation data.While the week , IT stocks surges as rupee depreciated to 44.26 compared to  dollar. Infosys , Rolta , Satyam are shining more then others.  This week also witnessed the expiry of the current ( August) month Futures & Option contract. Rollover position was also good in comparison  of last 3 month. Market Wide rollover was 84 & compared to 79 % last month and 81 % avg of last 3 month. Nifty Futures makes a 75 % rollover , this is the highest in last 3 month.  Selective Stock / Sector Specific rollover also seen in market. IT is the biggest example. 

Other Asian and World market performed well last week , the US market traded well on news of  US Govt declared that US economy grew at a much faster pace in the second quarter. This makes US market to glitter.  In Asia , all major indices closed in green in weekly comparison  except the Shanghai Composite , it fell 0.3% on weekly basis. Dow moved 4.3% and Nasdaq moves 3.2% on weekly basis. In Asia ,  Hangseng moves around 2.5 % and Japan Nikkei moves 1.3 % on week over week.

Strategy for Nxt Week 

We are expecting Indian market will open on lower side due to selling in US market in Friday .      Friday gain was on account of short covering , so we are expecting a little profit booking on Monday . So market will be range-bound to the whole trading session.   As US market is closed on Monday on account of Labour Day holiday,, so crude will be the next major driver of world market as well as Indian market on Tuesday late session. As Strom Gustov will hit the coast of US on Monday. We are expecting a massive loss of money and lives from this Hurricane as this is stated as "Mother of all Stroms " . If this hit Oil rigs on US coastal areas and makes a worst case then we can expect a  surge in Crude oil prices on Tuesday , and if it dint create a worst scene then we can see a fall in crude prices to below $105/ barrel .  

NSG member meeting  will be held on 4th and 5th of this month to consider a waiver for India. We are expecting  that there is a fair chances that India will get that waiver. This will make a new boost to Indian market and there is a possibilities  that market will touch 4500 levels on this news .  

On 4th Of Sept , Bank Of England ( BOE)  & European Central Bank ( ECB ) will announce their monitery policy . Analyst believes that both BOE and ECB will kept their interest rates unchanged to 5% and 4.5% respectively. Higher interest rates are bearish for the stock market, while lower interest rates are bullish.  

Weekly  Calls -   

Technicals   

  • Buy Infosys @ 1725 sl 1690 ( on closing ) target 1790 - 1828 . 
  • Buy Satyam Computers @ 410 - 412   sl  399    target 427 - 435 .
  • Buy Bank of India @ 254 - 260  sl  246 ( on closing basis ) target 273 - 281. 
  • Buy PunjLlyod @ 290 - 295 sl 287 ( strict sl ) target 316 - 322 .
  • Buy IFCI @ 44.20 sl 43.25 (variable sl )target 47-49.50 . ( already mentioned in free SMS group)

Fundamentals

  • Accumulate GAIL on dips for a unconditional target of Rs 430 , keep a sl at 350 on closing basis. CMP - 384 , Risk - Average 
  • Buy IFCI on dips for a unconditional target of 66 ( derive from Book Value) CMP 44.70  

Posted by Abhishek

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