Make or Break Day? It is a Break day! | Stocks and Commodities

January 11, 2015
Time: 8.10 am

Make or Break Day? It is a Break day!

1. Last week though Nifty did not hit 52 week low, Sensex hit the 52 week low.
2. Though Nifty did not hit intraday 52 week low, on Friday it was 52 week closing low.
3. Though Nifty did not hit 52 week low, SGX Nifty hit 52 week low twice last week.
4. So there were enough Red signals last week about our markets breaking down.
5. That is why on Friday I wrote "Make or Break Day" but Friday somehow markets closed slightly positive.
6. But on Friday Nift gave up most of the gains it made during intraday and Nifty future just closed about 20 points higher.
7. On Friday when our markets closed, Dow futures were trading about 150 points higher and when the US jobs report came at 7 pm Indian time, Dow futures were up by more than 200 points and at the end of the day Dow was down by more than 150 points.
8. So the swing of more than 350 points on the downside, that too after falling four days.
9. Another factor to watch is that US markets fell in the last half an hour everyday last week.
10. That is a very bad sign as institutions sell usually in the last half an hour.
11. Today it is going to be a clear Black Monday. South Africa currency has fallen by 10% intraday.
12. All Asian markets are down.
13. SGX Nifty hit a fresh low of 7482 and now trading at 7520.
14. FIIs have bought for more than Rs 10000 crores of index options.
15. FIIs have sold for more than Rs 1000 crores in Cash market for two consecutive days.
16. If they sell for more than 1000 crores today then it becomes three consecutive days of more than 1000 crore selling.
17. That will be a very bad news for bulls, as this has happened only in 2011. In 2011, FIIs have sold for more than 1000 crores for three consecutive days and Nifty fell more than 20% that year and markets never tested the January first week high in that year.
18. FIIs have sold more than 1000 crores for three consecutive days many time but selling in January is very important.
19. That is because, usually January FIIs allocate fresh funds, not withdraw.
20. Though markets are in sell mode since March 2015, DIIs have been buying aggressively since March 2015.
21. But what will happen at one point of time if they stop buying?
22. It is the retail investors who have faith in the markets as markets have given 30% return in 2014, they keep pumping in money into Mutual Funds and in turn Mutual Funds keep buying.
23. At one point of time, if Retail investors lose faith and stop pumping in money, then Mutual Funds will not be able to support the markets, that is the time when markets will fall drastically.
24. We are entering the corporate results week with so much bearishness.
25. So what will happen when the markets are so bearish, if companies declare good results, then shares will not fall but will not rise also.
26. If the results are bad then shares will fall.
27. So which ever way you look, corporate season will bring mrkets down as one can not expect all companies to declare good results.
28. Reliance has been trading closer to 52 week high. If Reliance had fallen, then we would have been at a much lower level by now.
29. If LIC steps in t buy the shares, it will give a signal that markets have bottomed out.
30. In 2013 when Nifty hit 5100, that was what happened exactly.
31. But so far there has been no such news.
32. Nifty outlook for medium term and long term will also be changed once it breaks 7500 as per most technical analysts.
33. So in a way today's markets trade is also a make or break day.
34. But then it is a matter of time Nifty breaking 7500.