state of the market 29 jan 2012

State of the Market ReportJan 29 2013

Deepak Singhwww.stateofthemarket.net

Opening Remarks

www.stateofthemarket.net

The Market has a Mind of its Own – completely independent – and in it’s own unique way – it looks at economy, politics and stocks. To some…that view may appear quite bizarre at times

As a student of the market: Devote energy reading the mind of the market

rather than debate with the market

Is it easy to Read the Market?


Absolutely Not….

The job of the market is to confuse people. Market does everything in his power to condition us in the wrong direction

There is a saying: “Never trust the market when its intention seem obvious”

Always reflect how market is

trying to condition you?

What has market been doing?


Statement of Fact: Stalling at 6000+ levels on Nifty

2.86%

Month to Date

BUT Broader market does not look that great

1.92%

Month to Date

State of Nifty

Even on 10-day basis: the lows are at 5988-5990 and Highs at 6100

RBI Policy & Market expectations


The market has already discounted a 25 bps rate cut

Does it mean?

25 bps Cut will invite Sell on News

Will market rally if there is 50 bps rate

cut?

What RBI says will matter more than what it does?


RBI’s take on Economy

India's economic growth could fall to 5.5 per cent this fiscal before seeing gradual recovery next year. [This is lower than earlier estimate of 5.7%]

There would be a gradual recovery in 2013-14 and the economy could clock a growth of 6.5%.

Will RBI cut rates aggressively?

High inflation and widening Current Account Deficit (CAD) are big constraints in way of monetary easing

The big concern: Sticky Inflation

Under such circumstances, thinking of 50 bps rate cut looks like a stretch

What will constitute Breakout/Breakdown?


The Closing….Where Nifty closes for the day?

The Boundary is set…6100 on

bullish side and 5990 on bearish

side

Not Reacting is also a reaction


Positioning of Bank Nifty

Chartalert.com

BANK NIFTY has hardly made any move in Jan 2013

Lows/Support: 12530-12570

Highs: 12900


The Big Problem

Distorted Liquidity Structure

FIIs continue to BUY

DIIs continue to Sell

Record Under ownership on Indian equitiesRecord over ownership

No Sign of Turnaround in

sentiment?What if sentiment

turns –ve?

FIIs +783 crores in cash mkt

DIIs -864 crores in cash mkt

The Big concer

n

FIIs record ownership


FIIs ownership of Indian stocks as measured in the BSE 200 reached an all time high as of December 2012….

Macquarie Report

Stocks that witnessed record Buying:

Tech Mahindra , Indusind Bank , Housing Development Finance Corp Mahindra and Mahindra Financial Services , Mahindra and Mahindra

Record trimming of position: Aditya

Birla Nuvo


Tracking INR

The rupee weakened on Monday, posting its biggest

single-day fall in three weeks

Pearls of Wisdom

Trading Lesson

Never Give up on Stop Loss

Frustration:

I know, I know, every time you have a stop loss in the market, the market moves just enough to stop you out, right?

Problem is Not Stop Loss But where you place Stop Loss

Well it might mean that you should evaluate where you place your stops (this is where good trading journals come in handy), but once you’ve done your analysis and placed the trade, you need to be committed to the trade and your plan. The only adjusting you should do is to lock in your profits


Mark Hodge

One Big stock cannot break the market


Come on, admit it, if you'd seen today's headlines four months ago regarding Apple you'd have bet the farm or at least the orchard that the S&P would be below 1,300." - Jeff Cooper

Reality: S&P500 is at 1500 despite Apple meltdown


Thank You

• Disclaimer - The state of the market presentation is Deepak's perspective on the market. The presentation is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this presentation you agree to make no trade relying in whole or in part on the comments of the writers

• For Feedback: Please email me at [email protected]

state of the market 29 jan 2012

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