Markets to remain weak

US markets were down almost a percent during the afternoon with Dow down about 100 points and Nasdaq down by almost 24 points. But later in the afternoon, because of some bottom fishing and value buying emerging at below 11K mark the markets recovered a bit and ended in red with Dow and Nasdaq down about 0.45% each. All European Indices also closed in deep red with each index losing about a percent and half. Today morning also Asian markets have opened lower and trading weak. So all in all today morning also we are getting negative global cues but they are not as bad as they were yesterday. Yesterday we saw a gap down opening but market moved up in the afternoon because of "short covering" happening at lower levels. This was clearly evident from the way "discount" between Nifty Futures and the Cash market fluctuated throughout the day. We opened the day with a 40 point discount on Nifty futures and during the afternoon when the short covering happened the discount was reduced to a mere 17 points. But because of lack of any buying emerging at higher (or these) levels, the discount again started to widened and by the end of the day it came to 57 points. So lots of people started shorting the market again during the later half of the day. It is important to note that we have breached some crucial technical levels yesterday. Nifty closed below the crucial level of 2950 and Sensex below the 10K mark. Technically speaking, we are at an extremely crucial level at this point of time. If we manage to hold above the previous low of 2896 made on Nifty, then the medium term bullish trend will remain intact. Otherwise below this 2896 level on Nifty, the next support is at 2700-2750 levels which most of the analysts believe is the strongest support which we can find throuhout this correction.

So markets continue to remain weak with a negative bias and unless and untill the global picture on interest rates,inflation,slowing American economy etc become clear we will continue to see a high amout of volatility in days to come. The only silver lining is that our economy is doing great at this point of time and this may be the time to pick good companies at great prices.


Quote of the day : Corporate financial statements are like bikinis .. what they are show are very interesting ; what they hide is vital"