Date: August 21, 2015
The week gone by has been very
turbulent for the Equity Markets. This turbulence was on account of Global
factors more than the Local factors. Chinese flash manufacturing PMI came at a
77 month low suggesting a slowdown in the Chinese economy, which may hurt the
Global Economy as well. One major factor for the fall in our markets was also
the weakening of the INR against the USD, which led to selling by FIIs. However
not all is lost, as crude oil prices are at almost 8 year lows and likely to go
further down. The lower crude oil prices should help containing the CAD to a
respectable figure by decreasing the subsidy burden to a great extent.
Inflation too is seen easing and IIP is seen rising. All in all the stage looks
set for the RBI to cut interest rates sooner than later. We will leave the rate
cut to be decided by the RBI though.
Also the funds exiting China should
be coming to India, in short China’s pain is India’s gain.
Technically the market seems to
have bottomed out. With strong support around 8220-8210 range, the Nifty may
have touched its bottom and looks set for an up move.
As can be seen in the above
picture Nifty rose from the lows of 7940 to the highs of 8654. The Fibonacci retracement
of this move of close to 700 points comes around 8220.
Provided Nifty has bottomed out,
what are the targets for up move? According to technicals we should be seeing a
rally in Nifty from current levels to new highs. The targets can safely be
placed around 8900 and 9300+
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