US economy is showing signs of a slow down, rising core inflationd data and the hawkish tone used by US Fed chairman Bernanke spooked the equity markets world over. Analysts believe US Fed is clearly signalling one more 25bps hike in interest rates. Dow closed down almost 200 points or 2 % and Nasdaq was down 50 points or 2.5%. Clearly markets world over didn't like such commentary by the fed chairman. This has led to a meltdown in all the emerging markets across the world. Brazil was down 3.5% , Mexico was down 2.5% etc. This cleary indicates that we will open gap down in today's trade. The crucial thing to watch out for is whether we close below the magical figure of 10K mark or not. Many institutional investors believe that if Sensex closes below the 10K mark then we may see lower levels in days to come. Also the Sensex has a 200 day EMA at around 9800 levels and many institutional investors will try their best that Sensex doesn't breach this level. The importance of 200 day EMA is that markets trading below this level are considered as "bear markets". Therefore this level is of utmost importance for technical analysis. Similar level to watch out for Nifty is 2900. Many institutional investors are saying that they will consider buying Indian stocks again at 9000 levels. Given that Indian economy is doing great at this point of time and valuation of some stocks have really reached mouth watering levels, I think people can start putting in some money in drips and drops and if this correction continues then they may average out by buying more and more at lower levels.
Quote of the day : "It's only when the tide goes out that you learn who's been swimming naked." -- Warren Buffet
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1 comment:
you are correct
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