Thursday, September 19, 2013

Bulls on steroids after Fed's surprise decision to stick to stimulus.

Market Update : Nifty above 6080 level on the US Fed decision to continue buying bonds at the current rate of $ 85 billion a month for now.Bulls on steroids after Fed's surprise decision to stick to stimulus.This also means that US economy is not recovering to the pace anticipated by FED,which opens the door for double dip.Should this move of FED be also read as preparation for US to strike on Syria? Maybe US do not want double whammy in form of tapering & strikes on Syria.Nifty is back to its earlier high seen in Jan 2013 & May 2013.Market is deceiving as only few selected stocks are participating in rally.Not getting into the euphoria,downgrade threat still looms large on Indian markets.The extension of global liquidity has given the Govt an opportunity to remove imbalance in the system.Govt should bite the bullet and undertake strong reforms or this rally may also end abruptly like previous rally seen in Jan and May 2013.Liquidity is a double-edged sword & until core economy improves,current strengthening of rupee and subsequent market rally may not sustain for longer period.As soon as liquidity tap is tightened the market will fall at much faster pace.India's woes w.r.t CAD/FD persists.Bottlenecks should be removed to pave way for secular recovery in economy.At 5120,we posted that should nifty close above 5225 & 5525 we may see strong bounce back in the Nifty.We were of the opinion that Nifty may cool off at 5895/5944 level.However last night surprise move by Fed has given further impetus to bulls.Market will take further cues from new RBI governor RR in his maiden monetary policy announcement on Friday.RBI's priority will be to boost investment cycle and revive economic growth.Given that growth in the economy is at a low point, business confidence is weak and the investment cycle has come to standstill we expect RR to initiate measures that will kickstart moribund economy and boost the investor confidence.Govt should follow up by removing bottlenecks & pave way for reforms.Will the Govt take this opportunity to set the house in order or squander the opportunity?Looking at past track record we have serious doubt on Govt's priority.Immediate nifty support and resistance levels are 5944/5862 support levels & 6092/6182 resistance levels.Subscribe our Advisory services for profitable trades in Nifty,stock Nifty & equity.All trades are given with risk management and fund management with 3d strategy of Technical,fundamental & psychological analysis.For advisory services click - http://www.acestocktips.com/ShowCategory.aspx For daily nifty trading levels with Ace Trading Table check out www.acestocktips.com

No comments: