GOOD MORNING!!!
AS EXPECTED INDICES WERE EXACTLY WITH OUR PRIDICTIONS. THE KEY BENCHMARK INDICES RETREATED FROM THE DAYS HIGH TO SLIDE INTO THE NEGATIVE ZONE ON PROFIT BOOKING ON ACCOUNT OF SLOWDOWN IN INFRASTRUCTURE SECTOR GROWTH DATA, MAJOR SET BACK FOR THE MARKET WAS INFRASTRUCTURE STOCKS DECLINE ON PROFIT BOOKING FROM THE RECENT GAINS. MARKET TURNED FROM STRONG OPENING TO A VERY WEAK CLOSING.
KEY EVENTS TO WATCH OUT IN THE MARKET ARE :-
1. UNION BUDGET ABOUT TO BE PRESENTED ON 06 JULY 09
2. ANNUAL ECONOMIC SURVEY IS SCHEDULED TO BE PRESENTED ON 02 JULY 2009
3. RAIL BUDGET ON 03 JULY 09
4. CORPORATE SECTOR IS EXPECTING A REMOVAL OF FRINGE BENEFIT TAX IN THE BUDGET. UNDER THE CURRENT DISPENSATION, AN EMPLYER HAS TO PAY FBT AT 30% ON THE FRINGE BENEFIT, THE TAXABLE VALUE OF WHICH IS DETERMINED IN ACCORDANCE WITH A FORMULA. FBT IS A TAX LEVIED ON PERQUISITES OR FRINGE BENEFITS PROVIDED BY AN EMPLOER TO HIS EMPLOYEES.
5. DOMESTIC BROKERAGES AND FUND HOUSES WANT THE GOVERNMENT TO REMOVE SECURITIES TRANSACTION TAX (STT) ON TRADING IN SECURITIES IN THE BUDGET. SEBI HAS ALREADY FORWARDED THE DEMAND OF BSE AND NSE IN THIS REGARD TO FINANCE MINISTER.
6. INVESTORS WILL ALSO BE KEENLY WATCHING FOR THE OUTCOME OF THE EMPLOYEES PROVIDENT ORGANISATION (EPFO'S) ADVISORY BODY MEET ON 04 JULY 2009. THE CENTRAL BOARD OF TRUSTEES (CBT) WILL TAKE A VIEW ON FINANCE MINISTRY'S PROPOSAL TO INVEST 15% OF ITS CORPUS IN THE EQUITY. THE EPFO HAS A CORPUS OF ABOUT RS 1,82,000 CRORES AND THE PERMISSION TO INVEST 15% FUNDS (27300 CR) IN EQUITY COULD HAVE POSITIVE IMPLICATIONS FOR THE CAPITAL MARKET. A PROPOSAL TO PARK FUNDS IN THE STOCK MARKET WAS EARLIER REJECTED BY THE EPFO'S FINANCE AND INVESTMENT COMMITTEE (FIC) AT ITS MEETING ON 26 MARCH 2009.
TODAY MARKETS WOULD OPEN IN RED AND WOULD REMAIN RANGE BOUND, THIS IS A VERY GOOD BUYING OPPORTUNITY IN SECTORS LIKE INFRASTRUCTURE, POWER AND FERTILIZERS ONE CAN INITIATE LONGS IN THESE SECTORS, TRY TO ACCUMULATE WHEN MARKET IS DOWN. IF NIFTY TRADES BELOW 4287 THEN IT WILL TAKE GOOD SUPPORT AT 4240 AND IF NIFTY HAPPENS TO TRADE BELOW 4220 LEVELS THEN IT IS WISE TO HEDGE YOUR LONGS WITH EQUAL PROPORTIONS ELSE STAY LONG WITH 3:1 HEDGING STRATEGY, ON THE UPSIDE IF NIFTY TRADES ABOVE 4340 THEN IT IS LIKELY TO REBOUND TO 4394 AND FACE RESISTANCE AND IF MANAGES TO TRADE AND CLOSE ABOVE 4400 THEN THERE IS EVERY POSSIBILITY THAT IT WOULD BREACH THE RECENT HIGHS. IF MARKET MANAGES TO GET ANY POSITIVE RESPONSE FROM THE ABOVE QUOTED 6 EVENTS, MARKET LIKELY TO HIT NEWS HIGHS AND MY FIRST TARGET WOULD BE 4900 AND MARKET WILL START MAKING HIGHER HIGHS.
BUY DR REDDY ABOVE 780 SL 769 TGT 792/802/814
BUY CHAMBAL FERTILIZERS SL 66 TGT 69/71/73/80
SELL TULIP 850 SL 857 TGT 830/818
RELCAP BELOW 900 SL 911 TGT 886/875/866
RELINFRA BELOW 1200 SL 1211 TGT 1181/1162/1123
TATAMOTORS BELOW 292 SL 296 TGT 285/278/272
