You must read previous articles and
watch above chart carefully to understand this article completely.
Today’s outlook: -
Nifty is coming towards critical
5630 marks but never broken. It hit a low of 5641 on Friday, 5645 yesterday. We
spend 14 trading sessions in the same range of 5730 to 5630. We have RBI
monetary policy review today. I must say that market has denied too many
negative news flows in recent past. Nifty has digested the fall of reality
stocks, banking stocks and massive dip of Dow Jones. Let us look consolidation in
another way too.
We have 14 range bound session after
hitting top. I can assume that it must have thrown all weak bulls of the
market. Now it is just waiting for some trigger to move northward. It can be
RBI monetary policy. Alter way, if rate cut does not came as the market is
wanting then it will break 5630 today. We all know what can happen after the
break of 5630.
So finally, we still need to wait
for 5630. Now, what to expect from RBI monetary policy? I read yesterday’s
economic survey report. They have reduced GDP target substantially from
6.50% t 5.70%. Paper has shown concerns over inflation and growth too. Unexpected
is nothing but I am sensing that we will not get any rate cut. Even if we get
then it can just be 25 basic points of CRR cut. 50% traders are expecting 25
basic point repo rate cut and 25 basic point CRR cut.
What is meaningful? Cut in CRR does
not have its meaning. Without a cut in repo rate you cannot justify these
actions. If RBI wants to cut any rate then it should be repo rate or both. Cut
only in CRR is just not making any sense.
Apart from this, I am lot scared
about Kelkar committee report. Our market might not be ready to digest higher
fiscal deficit. As of now market has not reacted yet.
Technical charts are stopping all it’s
conclusion at 5630. So I have nothing new to add. We might see silent opening
and silent trading before RBI policy.
Have a great trading day,
Regards,
Praveen Kumar
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