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 RBI PLAYS SPOILSPORT – SO THE BULLS THINK . . .  

Trading levels – 8^th / 12^th  JUNE   2015

After out-guessing RBI on last two occasions, the FIIs tripped the third time. The RBI governor decided to play it safe – with in “V” -  rather than trying to go ballistic which was expected by the FIIs and the Bull operators.

25 basis point rate cut was accounted in the price as early as 8^th and 9^th May.  This becomes amply clear the way BANKNIFTY moved over 800 points from 7^th May close. After dismal IIP figures and good WPI and CPI numbers, the bulls were emboldened and started dreaming about 50 basis point rate cut and thus pushed BANKNIFTY further up by 500 odd points - irrespective of poor to very poor results from some PSBs. THIS LEFT NO MARGIN FOR DIS-APPOINTMNET FROM RBI.

Last week the market did play absolutely by the book. Monday was a lackluster trading session but all hell broke loose after the RBI governor announced 25 basis point cut with a rather HAWKISH commentary.  On Wednesday,  we saw mild continuation of the downward  momentum. On Thursday and Friday, bulls tried to consolidate at lower levels but could not post a positive close.

Finally, we have got  NIFTY closing below 50WMA line and the weekly  close is lowest since last week October 2014.  THIS IS INDICATING FAIRLY STRONG MOMENTUM ON THE DOWNSIDE WHICH CAN TAKE NIFTY TO THE LOWER BOUNDARY OF DOWNWARD SLOPING CHANNEL – WHICH IS AROUND 7700/7800 DEPENDING ON HOW MANY DAYS WILL BE TAKEN. INCIDENTLLY, THE INVERTED H&S PATTERN GOT NEGATED ON 2^ND JUNE.

I hope most of you have booked longs on Monday or Tuesday morning and are ready to re-enter whenever opportunity comes. MACRO PICTURE IS GETTING MURKIER BY THE DAY AND NOT LIKELY TO IMPROVE SOON.

It seems the effect of 50/100 DMA death cross is playing out. In fact, this is now visible on many many index stocks and I am convinced that it will take its toll.

Real long term investors are going to get very good attractive opportunities to invest in  favourite stocks in the coming two weeks.  Please keep your shopping lists and moneybags handy. PLEASE ENTER ONLY IN QUALITY STOCKS.

As I always say, we have to play percentages to make money. Bold bravado or blind  consensus following  does not help.  I HAVE JUST GIVEN YOU SOME FOOD FOR YOUR GREY CELLS.   WHAT DO YOU SAY ? ? ?

JUNE 2015 TRADING LEVELS are  posted.   You can have a look at the same before entering fresh trades. Keep visiting  my website – http://www.sumamura.com/sumamura-messages/. 

Please remember CAPITAL is always scarce  - even for Mr Buffet  and needs to be respected.

My monthly trading levels are out and paid members have them. At 3,000 rupees a year, they provide tremendous value for money proposition.

Keep logged on to yahoo messenger for guidance related to investment levels on specific stocks. I will be putting some of those recommendations on my website also under messages tab as well.

I am available on yahoo messenger on most of the trading days and you can add me on your yahoo messenger. My yahoo id is madhavranade1

Keep watching my website www.sumamura.com closely for further inputs. You need to register and login to see modules section where all the levels for different timeframes are  shown.

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Indices  weekly levels

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