BEATdSTREET

IN THE FESTIVAL OF LORD GANESHA IT’S “NIFTY BAPPA MORIYA” – BEATdSTREET September 14, 2010

Good Morning,

The resurrection of Nifty from 5353 to 5777 in just eight trading sessions has been nothing short of a dream run. But, how long can such reckless momentum be sustained is the million dollar question. The India VIX is at 18.14 up by 13% in just one trading session! The upper Bollinger Band is at 5690 and the RSI close to a century. The NSE Nifty PE is 24.32. They rightly say that in mad herd rush, rationale is a “care two hoots” commodity. So, it needs to be seen where this juggernaut actually rambles to a point of reversal (read it as – correction).

If the Bull Run continues today, then it may do so up to Monday, September 20, 2010. However, correction may in all probability set in today and last until either Thursday or Monday. The vital turning points are at 5677-5641-5615-5582-5565-5531-5514-5499-5444.

Well, the set up seems too perfect to be ignored. Would you believe that the Nifty 5700 PE OI rose by 189%?
RBI is to meet at noon on the 16th of September for the Monetary Policy and increase rates before temporarily switching into pause and watch mode. This will ensure tight liquidity and perhaps dampen the growth rate, which incidentally the RBI desires so that the growth can be “sustainable”. According to sources in the Finance Ministry, the WPI Inflation should start dipping from this month and the GDP for FY 2011 expected to scale 11% while the Indian Economy is expected to grow more than 9% in FY 2012.

Energy and Oil companies may stand out today and have their day out in the sun.

Nifty Future has support at 5734-5705-5686 on the downside. On the upside the resistance is at 5776-5799-5825.