- When an asset is in up trend, reasons follow the prices and not the vice versa
- Nifty Year to Date is up 36%. USDINR equation is almost unchanged YTD
- The S&P 500 SPX is up 11.86% year-to-date. Nasdaq has advanced 14.7% this year, while the Dow added 7.5% so far this year
- Rationale for US market rally: Interest rates are low, so stock valuations should be high. The higher yield offered by equities makes them more attractive than low yielding treasuries.
- Based on Alan Greenspan theory: As long as bond yields are less than earnings yields, stocks are cheap
- One Big Consumption Stimulus: Collapse in Commodity prices is for real. Brent Crude Oil at $70. The collapse in Oil prices over last few months has been vertical
- Last week was one of the worst weeks for Crude in 20 years. Crude was down -13.7%. Weekly RSI at most oversold level in history. Shares of Exxon Mobil and Chevron fell 4% and 5%, respectively.
- No wonder in India: Oil marketing companies rallied like crazy. HPCL was up 8.9% on Friday. But the biggest beneficiary of lower Oil prices: Jet Airways. The stock was up 20%. I covered the stock in my notes on Nov 26 2014 as Turnaround play.
- Indian economic growth is not picking up. GDP grew 5.3% in Q2 FY15. The real problem area: Manufacturing Sector which grew at 0.1%.
- What's Next?: Reserve Bank of India’s (RBI’s) monetary policy review is on 2 December and there is a hope that RBI will cut rates to boost growth considering inflation has come under control
- Rate cut hope: PSU Banks rallied - Canara Bank rallied 7.67%, Bank of India was up 5.44%, Bank of Baroda up 7.23%, and Punjab National Bank zoomed 7.92%
- Bharti at 100 dma: Bharti Telecom stock is at 100 dma/380 levels support. Technically, the stock should bounce from level of 380 - again back to 400+. Any declines below 380 might lead to more selling to 350.
- Snowman Logistics at 20 dma: The stock seems to be taking support at 20 dma. Will it rally?
- Aban about to Breakdown: Collapse in Crude Oil is bad news for Oil drilling services companies.
- Ahmednagar Forgings Breakdown below 50 dma: The stock is now heading towards 100 dma
- Tata Sponge is at 200 dma: Will it hold and rally?
- Mandhana Ind: Is the breakout for real? The stock after many years has closed above 285 on weekly basis and sustained above it for two weeks. As long as stock trades above 285 - there is hope of follow through buying
- Geometric Software at 200 dma: The stock has been holding 200 dma for quite some time now. Will it hold and rally or succumb below 125?
- Gold could face its own OPEC moment. As per exit polls -Swiss voters look set to reject gold initiative. Gold all set to collapse dramatically.
- 1 USD = 62.24 INR. There is a possibility of INR depreciating to 64
- The market is a genius: It’s only wrong twice: At the very top and at the very bottom
Please share your comments on what you think of market observations, market and trading in general
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers