This post is just taking stock of status prevailing now. A post for strategy to trade on 13th will be published on 12th August. The factors that we should consider now to form our viewpoint (about how market will move from hereon) should take into account following developments:
1) Next week is heavily truncated week. Market is open for only 3 out of 5 days. So next week we have only 2 days before weekly expiry of Nifty and Banknifty options, tuesday and wednesday. So this will play out on traders' psyche.
2) IIP for June is at 2%, down fron 4.5 % for May month. That's huge drop from seven month high figure.
3) Reduction of Surcharge on FPIs- The meeting happenned on friday between all market particpants, i.e. MFs, FPIs, investment banks,etc and finance minister to hear their grievances. According to a finance ministry official," multiple options are on the table and nothing has been finalised as yet. We will take some measures shortly". What else was expected? But what FPIs/bankers got through the meeting will become clear in initial few hours on tuesday. If they saw any seriousness and urgency in finance ministry officials' responce w.r.t. surcharge, the market either would react positively or atleast remain neutral. But if these bankers saw the meeting as a token gesture, expect heavy selling on tuesday. And that would continue for next few days till we hear some decisive action on this front.
4) Other markets on 12th August- Other economic developments in the world at large will be reflected in market movements on 12th. So we will cue from that too. So essentially, US morkets on 12th Night and Hangseng, SGX nifty on 13th morning will influence our openning on 13th August.
5) On friday USD increased from a low of 70.44 to close at 70.80 at 5 pm, an increase of 36 paise.
6) Brent crude is USD 58.5 per barrel, which is way too comfortable for us.
So of all the points listed above, except crude rate everything else points in negative direction. In the light of these developments, the high scaled on friday, 11181, becomes important milestone because NIfty climbed down 72 points before closing at 11109. So if Nifty closes or even breaches 11181 in intraday, it should be taken as positive development for markets, otherwise it is back to square one- Sell All!
1) Next week is heavily truncated week. Market is open for only 3 out of 5 days. So next week we have only 2 days before weekly expiry of Nifty and Banknifty options, tuesday and wednesday. So this will play out on traders' psyche.
2) IIP for June is at 2%, down fron 4.5 % for May month. That's huge drop from seven month high figure.
3) Reduction of Surcharge on FPIs- The meeting happenned on friday between all market particpants, i.e. MFs, FPIs, investment banks,etc and finance minister to hear their grievances. According to a finance ministry official," multiple options are on the table and nothing has been finalised as yet. We will take some measures shortly". What else was expected? But what FPIs/bankers got through the meeting will become clear in initial few hours on tuesday. If they saw any seriousness and urgency in finance ministry officials' responce w.r.t. surcharge, the market either would react positively or atleast remain neutral. But if these bankers saw the meeting as a token gesture, expect heavy selling on tuesday. And that would continue for next few days till we hear some decisive action on this front.
4) Other markets on 12th August- Other economic developments in the world at large will be reflected in market movements on 12th. So we will cue from that too. So essentially, US morkets on 12th Night and Hangseng, SGX nifty on 13th morning will influence our openning on 13th August.
5) On friday USD increased from a low of 70.44 to close at 70.80 at 5 pm, an increase of 36 paise.
6) Brent crude is USD 58.5 per barrel, which is way too comfortable for us.
So of all the points listed above, except crude rate everything else points in negative direction. In the light of these developments, the high scaled on friday, 11181, becomes important milestone because NIfty climbed down 72 points before closing at 11109. So if Nifty closes or even breaches 11181 in intraday, it should be taken as positive development for markets, otherwise it is back to square one- Sell All!