Posted by: Babu Suresh | March 21, 2009

NSE Nifty Spot-Weekly Analysis-21st Mar 2009

Daily and Weekly Spot Nifty charts:Nifty_Spt_DW_200309

An interesting week that witnessed many unique events. Notably, inflation falling below 1, INR trading above 50 without any respite, sending signals of impending interest rate cut.

Spot Nifty posted a weekly gain of 3.2% compared to 5.2% the previous week. Many front line stocks traded with good volume while the banking stocks were treated with utmost caution. But still I would advise to buy some selected bank stocks during the next correction phase, which should start any time soon.

Inflation, the term until 2006 was less cared or even unheard of amongst our trading communities but, in the absence of anything substantial, this term took the center stage beginning mid 2007. Our country is unique and can do wonders and some dramatic things that no other country on this earth can imagine of. Last year, the inflation reached historic low when the market was trading above peak and crude was around $100; USD was available at a throw away rate; suddenly during mid of 2008, crude was running out of control and INR dramatically started depreciating in the name of FIIs selling stocks; inflation started crossing Himalaya peak, huge noises were made by the Finance ministry. Now the whole scenario has changed, god knows how; the same inflation is sending many to sleepless nights with a new worry of deflation looming high on the horizon. lol

RBI is again back at the center stage with its much awaited interest rate cut, with big lectures making rounds suggesting this is the right time to cut interest rate. I will not be surprised if the inflation suddenly goes above 2 within next few weeks and INR falling below 50 because, as I mentioned above, anything can happen in our country. 

At this stage, I don’t want to presume anything about the market direction as many things can happen. We all have already booked 50% profit and have nothing to worry.

My last week’s resistances were firmly broken and now trading above 2779 with less strength. I feel the only issue that is keeping our market intact is, possible RBI’s decision. In the event of any developments on the Interest rates before RBI’s monetary policy meeting, it may not make much difference other than momentarily pushing Nifty above 2900.

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