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forgot to post "weekly take" last weekend ---- i had some personal engagement on 11th may weekend so it was not prepared.

WEEKLY TAKE ....

Trading levels --- 20th / 24th May 2013

5th consecutive up-week and market has gained whopping 700 points. This pace is clearly un-sustainable and we should be nearing a correction. When the correction will happen is entirely a function of FII inflows as there is no change in macro outlook and political scenario has in fact worsened.

In the month of April, we had slightly better CPI and WPI inflation figures …. Thanks to cut in petrol prices and deferment of diesel price hike due to Karnataka elections. But we have had double dose of diesel price hike in May. May CPI and WPI figures should be out before June RBI policy meet.

I am not too sanguine about rate cut in June meeting as the banks did not pass on benefits of May rate cut to industry. I think RBI will wait for one more meeting as that will give them enough time to see the effect of May rate cut.

However market has turned euphoric again about June rate cut and cheered in a big way pushing 6200 levels on nifty. Bank nifty is just about 45 points away from all time high and if we get about 6,000 / 7,000 crores FII money in next week, we may have scaled an all time high on nifty as well.

I wrote two weeks ago…. Don’t look at technicals or fundamentals as this is a liquidity driven rally and ride it with appropriate stop losses as long as you can. I will recommend 2 to 3 % stop loss on nifty and about 3 to 4 % stop loss on individual stocks

my weekly take ....

Trading levels  ---  6th / 10th  May    2013

This was a third truncated week on the trot. It was again a 4 day week. First three trading days were up days and the last one was a mild reversal from previous day’s high.

We are absolutely lucky that we have Dr. Subbarao as RBI governor – who has a very balanced head to think logically in any given situation. He also has capacity to withstand any kind of pressure that is put on him from the FM / Dy. Chief of planning commission / all types of industrial organizations etc etc.

He ensured that we had   a token  25 basis point REPO rate cut. Unfortunately the bank chiefs have decided not to pass on this cut to borrowers. RBI is the apex regulating body for all banks but all PSU bank heads report to FM  and he has indirect control over them.

So  - in reality – FM is fighting a proxy battle – with RBI governor – thru the Head of SBI. Please note number of times you saw SBI chief on TV in last 8/10 days.

US markets roared ahead last week when FED CHIEF BEN BERNANKE confirmed that he wl continue to buy bonds worth 85 billion US dollars every months – for next two three years.

Some of this money may percolate to emerging markets. Even 5 % will come to India in any particular month, our markets will show a huge jump. It may very well happen this month itself and we may be within knocking distance from a new all time high.

IN SUCH A SCENARIO … IT IS FUTILE TO LOOK AT TECHNICAL LEVELS. IT HAPPENED IN LAST QTR OF 2007 AND MAY WELL HAPPEN AGAIN NOW.

I have released monthly trading levels for MAY 2013 on my website – www.sumamura.com under messages tab and you can have a look at the same before entering fresh trades.
 

MY WEEKLY TAKE .....

Trading levels  ---  29th  April / 3rd May    2013

Last two weeks were truncated with just 4 trading sessions each. Out of 8 trading sessions 6 have been up days and two days have been small down days. Result is that the market has moved up whopping 350 points – averaging 45 points a day.

This is a big up-move and indicates extreme bullishness in the market.  All this is based on single likely event …. RBI rate cut … marketmen have factored in 50 basis point rate cut alongwith matching 50 basis point CRR cut.

This means there is very little room for further positive surprise but a whole lot of room for disappointment. Thus the risk / reward is now very favourable for bears. This is indicated by premiums for puts which are much higher than call premiums.

Bank nifty has been the star performer with more than 13 % up-move in last ten trading sessions. CNX IT has been a sour point as it has gone down by exactly similar percentage. If CNX IT was to just hold its level … NIFTY would have been above 6100 by now, raising visions of a new all time high.

Technically, I see a level of 5970 as major resistance which may be tested if RBI fulfills market wishes ….. even if RBI disappoints partially, we will be testing 5750 levels on the day of RBI policy announcement.

US market is showing lots of volatility on daily as well as weekly basis with alternate bouts of selling and buying. It seems that the bulls may be sapped of their energy and resources by the time the volatility subsides and the US markets may grind lower toward 1520 S&P levels.

Gold made a fairly strong comeback last week and I am glad to state that it just hit 1483 weekly high level indicated by me. Watch gold and silver weekly levels for this week as well.

I have released monthly trading levels for APRIL 2013 on my website – www.sumamura.com under messages tab and you can have a look at the same before entering fresh trades.
 

GOLD .... update ... at 4 pm on 23/4/2013

gold did not break 1430 level decisively ..... in fact today ( now at 4 pm ) it is trading around 1415 ... for some time ....

yesterdays move - was it a flourish i said earlier ... we will know later in the day if gold slips further and starts trading below 1400 level .... in that case earlier support of 1320/30 wl come in play again ... and eventual 1250/70 ....

but i still feel that ... this time the fall is not going to be quick ... and it wl be a slow slide .....