- When analyzing the market, one should always be a neutral observer seeing both sides (bullish & bearish)
- Bulls appear overconfident and complacent but you also cannot discount the fact that there are many looking to buy on dips on other side.
- Fundamentally - a sideways market appear more likely. Having said that - you never know what's in store for market participants.
- Global economy does not look healthy. Japan was downgraded by Moody, China continues to slow down and then US shocks with poor Holiday sales survey .
- Impact: US market did not react positively ans closed with bearish bias. USD index pulled back 0.5% and that resulted in Gold bouncing $50 from lows.
- Will there be rate cut today by RBI? If that happens, it would be interesting to see how PSU Bank stocks react.
- Reliance pulled back 3% yesterday. The stock has strong support base at 920 but on upside - stock lacks bullish energy
- ONGC broke down below 200 dma yesterday. All the Bullish momentum stock had seems to have disappeared now
- Text Book Turnaround: Jet Airways. The stock turned around above 200 dma, pulled back and then made a vertical upmove. I covered the stock in my notes on Nov 26 2014 as Turnaround play.
- Lower crude prices now driving stock prices higher. On Dec 01, Asian Paints rallied 7.13%, Berger Paints was up 11.78%, Kansai Nerolac up 3.07%, and Shalimar Paints moved up 8.24% on hopes of better margins. Cheaper oil reduces input costs for paint companies.
- Lower crude prices is also making life difficult for Oil services companies. Aban has cracked important support and Doplhin Offshore saw a pretty sharp selling
- Lower oil prices has destroyed Russian currency Ruble. See the chart below: Ruble has become the worst performing currency this year.
- According to The Economist, Russia requires a Brent crude oil price of approximately $100 a barrel in order to generate sufficient revenues from its economy, to pay its annual budget
- USDINR is almost unchanged YTD. 1 USD = 61.92 INR. It would be interesting to witness what INR does post monetary policy
- Bharti Airtel stock broke down below 100 dma. Does this mean - we are looking at bigger correction to 351/200 dma now?
- "Never trade in situations where you don't have control." - Paul Tudor Jones
- Snowman Logistics near 20 dma: The stock seems to be losing support at 20 dma. Stop Loss = 105.5
- Himatsingka Seide: The stock seems to be in early stages of Bull market. Yesterday, it bounced from 100 dma. Will there be follow through?
- HCC is at 200 dma: The stock seems to have found double dip support at 200 dma. The big question: will support hold? Any Long position should have stop loss below 29.3
- 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
- Three IT stocks on watch list: Geometric at 200 dma; Tata Elxsi poised for breakout; and First Source at 200 dma. Here's the First Source Chart
- "If you have made a mistake, deal with the mistake; don't compound it." - Michael Steinhardt.
- Clarity comes when you turn off the noise and let your eyes and price show the way
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