Thursday, April 17, 2014

morning thoughts...

The markets have been jittery with selling pressure in past few days and nifty couldnot cross the resistance levels of 6850 and tested the crucial zones of 6725 levels.
On the lower side 6650 remains as important crucial zones whereas on the above side 6800 remains as resistance zones and the markets are likely to dwell between this range with volatile moves in stocks.
The markets will give opportunity to both long and short traders and a strict stoploss is a must.
Sun transit in aries is a major transit and will keep the markets volatile.
Coming to the commodity markets bullions , base metals and energy will stay volatile and the strategy remains to buy on dips and sell on rallies.
We all know of evolution as a gradual change that makes a process or system robust over a period of time. Often, it is marked by synergy between the different entities leading to higher efficiencies, sturdier systems and faster mutual growth. Global economy is no exception to this process of change. Over the years, individual economies have shifted from operating solo to having significant interactions. The only difference is that the process seems to have done more damage than good. More so for the emerging nations. If one takes a look at the last few years, the increased connection has made emerging economies more vulnerable than ever. 
Take for example the years post 2008 financial crisis. This was the time of ultra loose monetary policy and low interest rates in US. While multiple rounds of unabashed money printing hardly worked for the US economy, it caused unmatched damage to the prospects of emerging nations. The reckless policy by Fed led to flood of capital to emerging economies in search for better yields. And what followed was inflated asset prices and equity markets and pushed up currencies for emerging markets.
So no wonder when US talked about tapering, serious concerns arose in emerging markets. The shifting of foreign capital back to advance economies rocked the currencies and stock markets of emerging economies. India was one of the hardest hit victims of the same. While one can not deny the internal mess that led to the crisis like situation for India; the role of monetary policies of central banks of advance economies can not be ignored.
So one would really empathize with Mr. Rajan who recently criticized multilateral institutions like IMF for letting advance economies get away with policies that had adverse spillover impacts on emerging nations. Mr. Rajan called for analyzing comparative costs and benefits of such policies, including the impact on emerging nations.
One can argue that emerging nations should fend for themselves with enough forex reserves in the event of such shocks. However, there is no limit to piling on forex reserves. While this can make a country less vulnerable, it also leads to slowdown in the global aggregate demand. 



Yesterday’s calls sent via sms and messenger

Gold Mcx – booked profits at 28370 – short from 28650
Silver Mcx – booked profits at 43770 – short from 44820
Advance nifty – booked profits at 6720 – short from 6835
Hexaware 170 ca – buy at cmp 2.10 sl 1.50 targets 4 – holding
Hdil – buy at cmp 69 sl 68 targets 74 - holding