The Week ahead 30/04/2007 to 4/05/2007

Market is wisdom…market is knowledge. Its a debatable fact that cumulative knowledge is more accurate and effective. But following cumulative knowledge often hint us regarding whats actually happening on the street. The theory of technical analysis stands on this simple fact.

Recently, our share market took another downturn on Friday and settled after a solid and steady decline. There were reasons behind this move. SEBI took regulatory move against some scrips following some alleged manipulatory rally in those scrips. Besides, Asian markets were not in good shape either. Resultant was Friday’s fall.

But apart from these news and facts, market players were not either much desirous of unabated rally. Matter of fact is that continued rally from 3600 made many players skeptical. They are much ready for ranged market. And thats what we are going to see in coming days.

Downside for spot Nifty would be 3900-3950, because results that corporate houses are delivering are not disappointing in any extent. Besides, annual credit policy for 2007-08 is quite encouraging. Accommodative monetary policy would boost market players and companies in coming days.

Appreciating rupee will ease RBI’s job of tackling inflation as strengthening rupee would make importables cheaper. Supply constraints of primary goods could be less chaotic. And price volatility should subdue.

Overall, picture ahead is less suffocating and bumpy. Market will remain stick to its range and continue testing our patience. Monday opening should be less dramatic. And After today’s of trading holidays, there should not be much hue & cry, visible, in last two trading days of this week. As we know, market keeps on fooling us around, any sudden irregularity won’t be difficult. But core tone of the market should be intact and ranged!!!

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The Week Ahead 23/04/2007 to 27/04/2007

Before anything, I must say sorry to my readers for a discontinuity in “ the week ahead” series. Due to some personal compulsion I failed to come out with the last week’s post. Despite my ever-increasing professional preoccupations, I would love to blog regularly.

Anybody, familiar to my viewpoint in February and March, would have recognized that I was expecting a bear phase at least for medium term, potentially for rest of this year. I even several times, indicated possible factors behind such potential bear run – technically and fundamentally.

But market is no easy game. Here, the most unexpected often becomes inevitable. And people see themselves in wrong foot. I must confess my bearish explanation didn’t performed well in reality. After several weeks’ of submissive move last week market shrugged off its weakness and once again enjoyed some power boosters.

Results are pouring in. Companies are not delivering bad numbers either. Some big-ticket companies have performed in line with the street expectation. Overall outlook is not plagued.

Inflation and interest rate are still not out of critical zone. But companies are seems like practicing to stand with these pressures. FCCBs and other external borrowings are providing some easy way outs for fund requirements. Inflation is still ruling above 6% level but recent monsoon forecast is in-line and satisfactorily steady. So, inflation expectation is not looking annoying even.

To sum it all, we are now out of danger (a tough call for me). And I feel I should grant leave to my bear-thoughts. But I am not steadily bullish either as I was in last few years. Level of participation has decreased in the market. People are not much confident. And after three consecutive crashes in a single financial year, investors are not feeling the mood to splurge easily in the market. So, no robust rally I am expecting in near future. Market will remain steady and will test our patience. Possibly, some ranged and flat moves ahead.

The Week Ahead 09/04/2007 to 13/04/2007

Technically speaking cash Nifty50 is going to build a head & shoulder pattern. It’s not fully built yet. Last shoulder is still in building phase. Whether a full-fledged pattern will form or not depend on the price movement in few coming days. Its possible that, price will take a positive break out. And in that case it might go up to 3900 or higher. If price trend forms an H & S pattern then 3600 or lower levels are on the card.

No positive impetus is around. This week two important news are due on Friday. Inflation data and Infosys result. They can leave potential impact.

On the other side, money market is easing. Call rate is going back to normal levels. Sudden appreciation in INR might get corrected. Some FIIs, mainly portfolio investors, who were earlier not taking money out, may choose to liquidate some part and buy dollar. If equity market continues poor performance than this can a good option, at least for the time being, for foreign portfolio investors.

This week, not much writing from my side. Expect, more posts through the week.

You can also visit me at: dipanksaha.instablogs.com

I do write there regularly.

The Week Ahead 02/04/2007 to 05/04/2007

RBI announced another hike in CRR along with an increased REPO rate and reduced interest payment on CRR balance. Inflation number has got stagnant at 6.46% level for last two weeks and no visible indication of it’s going down. Harvest season is almost at the door. Global production of food crop is not satisfactory and occurrence of speculative hoarding is pretty high.

On the other side, market sentiment is not exceptionally strong. In last few days volume was high when market was in positive territory, that might force people to think that sentiment has got back its strength, but actually most of the strength was rollover backed. Even, magnitude of rollover is poor this time compared to past experiences. People are just too averse to take risk. No direct indication of follow through buying.

From second week 2006-07 results will start coming in. Appreciating rupee continuously shadowing the prospect of IT sector. Recent monetary tightening will hit banking companies hard. Due to increased cost of raw material, steel producers are increasing steel price and that can be a positive factor in the market.

Tomorrow market will often at down side only, if everything remains same. And if market fails to sustain couple of hundreds points down side then we can expect some down slide. After that Infosys will publish 4th quarter result on 10th April, any below the expectation number can set the fire. Though, it’s also true that some real good number from Infosys and other companies can change the course overnight.

I beg your pardon for my pessimism, but I am seeing no sure reason to get engaged in festivity. Best of luck.