MARKET VIEW FOR 25TH JANUARY 2011

AN IMPORTANT EVENT TODAY IS THE CREDIT POLICY TODAY, WHERE RBI MAY TAKE ACTION ON RATES, LIKE REPO, REVERSE REPO, SLR AND/OR CRR. CHANCES ARE THERE THAT RBI MIGHT HIKE REVERSE REPO RATE , BY 25bps TO 50bps. THERE COULD ALSO BE SOME VIEWS ON THE FUTURE COURSE OF ACTION IN TACKLING INFLATION. A 25bps POINT HIKE IS PRICED IN BY THE MARKET. ANY ACTION ABOVE 25bps MIGHT LEAD TO SOME KNEE JERK REACTION IN THE MARKET. HENCE 1ST HALF WILL BE SLACK AND AFTER THE CREDIT POLICY THERE WILL BE LOT OF ACTION. ALSO THERE WILL BE MORE ADJUSTMENTS DUE TO F&O EXPIRY AFTER HOLIDAY ON 26TH JANUARY, ON 27TH JANUARY.


IF THERE IS 25bps HIKE IN REVERSE REPO RATE MARKET COULD RISE TO THE TUNE OF 50 TO 70 POINTS TILL 5820-50.
IF THERE IS 50bps HIKE IN REVERSE REPO RATE MARKET COULD COLLAPSE TILL 5500 OR EVEN TO 5400!!!!!!!!


WHAT SHOULD ONE DO??????


WAIT AND WATCH TILL POLICY COMES OUT. DONT JUMP AND BUY BUT SEE THE GOVERNOR'S APPROACH AND LANGUAGE TO GAUGE THE FUTURE COURSE OF ACTION ON TACKLING INFLATION.


FOLLOWING STOCKS NEED TO BE SEEN TODAY FOR SHORT TERM DELIVERY, IF NIFTY SUSTAINS 5750-5800,ON POSITIVE MARKETS:


CITY UNION BANK( 46.10) T-48-50-53
HCL TECH (508.15) T-512-516-520 SL 500
IDEA(69.40) T-72-75++++ SL 66
LUPIN( 469.15) T-480-90 SL 460
SHREE RENUKA (90) T-92-95-100++++ SL 87


ALSO WATCH SOUTH INDIAN BANK, ICICIBANK, HDFCBANK, SBI, BANK OF BARODA


IF THERE IS MORE THAN 25bps POINT HIKE THEN SIMPLY SHORT NIFTY FUTURE OR CALL OPTION.


NOTE THAT NO LARGE BUYING IS SUGGESTED VENE IF THERE IS 25bps HIKE AND MARKET IS POSITIVE AFTER THE POLICY AS OVERALL VIEW IS TO GET OUT OF THE MARKET BY NEXT WEEK OR TWO WEEKS AS THERE IS SIGNIFICANT CORRECTION TO COME WHICH MIGHT TAKE NIFTY TO 5400-5200 SOON. HENCE AVOID LEVERAGED POSITION AND LONG TERM INVESTMENT AS OF NOW AND TRY TO GET OUT OF THE STOCKS ON EVERY RISE.

Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.

Disclaimer: 
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.