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+
