Anagram's Daily Call : 07/07/2008
VIEW POINT: POLITICS TO THE FORE AGAIN
As we begin trading this week, the Nifty has role cut out for itself. It needs to close above the 4165 mark, which is nothing but a 38.2% retracement of the 831 point fall it has seen in the past 13 sessions. Apparently the level appears to be within a striking distance, but we will believe it when we see the Nifty closing above that.
The reason for this lack of confidence is the way the Nifty has behaved in the past and also the fact that primary reasons, rising inflation and a higher steaming crude, because of which the markets fell at the first instance, are there in full force. But it is possible to see a rally on account of the recent political developments that will ensure that India takes the next logical steps in the nuclear deal. While the buoyancy in the capital goods could continue for a while, partly on nuclear rub-off, it may be time to reboot your IT memories and apparoach the sector with an open mind, where a top line explosion, courtesy the rupee depreciation awaits. To what extent they are able to convert this newly found affluence into a fatter bottomline, will determine, whether we have an engine for an intermediate rally on our hands or not.
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