Morning Bells (28 Aug 13)

Good Morning Friends.

The only thing I learn in long run is – you should have patience and some money to put on risk with same stock repeatedly till you don’t get desired result. If you don’t have that much money then you should get out of market else sooner or later market will kick a** you.

So, it was absolute ruckus on the street as the Nifty closed near its lowest level since September 6, 2012 even as the BankNifty ended at its lowest level since January 11 2012.

The main reasons attributed are the rupee’s continued weakness and the Lok Sabha approval of nearly US$20bn plan to provide cheap grains to the poor. Heightened concerns are that India’s fiscal deficit will balloon further.

And now view is – due to CAD now you under downgrade queue, and if happens instead of your reducing CAD it will increase by another approx 3-5%. What’s the impact? TRAHI-TRAHI because I don’t know whether you people know it or not, my internal study says – Govt. don’t have funds, they are just managing their current turn till next election by disinvestment PSUs stake. So new term will kick start with heavy taxes, increased fuel prices which itself mean you have to pay more and whatever you will earn you will take home less.

Fitch Ratings also has warned of a downgrade if the country is unable to meet fiscal deficit target. It said reining in the fiscal deficit at 4.8% of GDP would be a difficult task.

Now Rupee also seems to hit 58-69 during the year and most believes that it will bottom out near 69, mean another 10% fall is on card. (For more details please read y’day MB)

More bad news are on the way – CRISIL is also planning to exit our market. (Read stock outlook section)

Next Triggers -

New RBI Governor and monetary policy in September will be the next trigger. Market is also expecting big hike in Diesel prices which would definitely give market a boost.

MARKET OUTLOOK –

Once the negative sentiment grips then it has its own momentum and many efforts goes out of the way, this is what now happening with our market. I was repeatedly opposing steps taken by Govt. to curb the Rupee fall and finally we have seen what I had warned about currency.

Well as discussed y’day market will not fall much atleast till the expiry and we will see actual actions in next series, it may be possible we may see some big actions on coming Friday.

So this time of expiry and no technical works, I can just say we may see expiry around 5300 level or may be between 5350 to 5400. (But not sure, today’s market will reveal the story)

For Nifty to face resistance around 5500 (in view of next series) while it will find support around 5240.

Market is in intraday trading zone, just swim with flow, and old suggested quote is here – close your position before market close and in some selective stock go BTST or STBT.

For medium term or next series, outlook is still negative till Nifty doesn’t close above 5504. 20DMA is 5646 and 40DMA is 5710.

STOCK OUTLOOK (Stock that will see good volume this week) –

IDFC -

IDFC shares hit its four-year lows in the day's trade and closed at Rs. 79.45 down a whopping 16.15% or Rs.5.30 from its previous close as the overall foreign shareholding limit in the company has been reduced to 54% from 74%.

CRISIL –

CRISIL shares slipped by Rs. 10.95 or 0.97% after the company announced that plans to sell its 49% stake in India Index Services & Products Limited (IISL), its Joint Venture with National Stock Exchange of India Limited (NSE).

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