interesting squeeze between support of resistance…
the level of 37 which i though in my initial analysis will be a resistance has been converted into a support now, and has been tested 5 times now…
results on 14th…
disclaimer… positional trade active will exit on any pre result rally , which is unlikely, with the bearish looking broader markets
bajaj finance should continue to move in the uptrend channel till the levels of 2953-2964 comes[from point and figure chart] … there i expect some rotation to come…
interesting case of 1.5year old accumulation which has got its supply exhausted and absorbed at the 52 week wilder moving average and is due a phase c change of character and sign of strength…
May be but unlikely as EM currencies generally depreciate during periods of Fed tightening like now. But with Trump being the joker of the pack, any forecast is falliable.
I think, one should be cautious around the Jan/Feb months in 2019. I see a lot of factors (Politics/elections, crude, USD, Nifty all time.) are pricing in to trigger the correction in those infamous months. The technical chart do suggest that the ongoing rally will last only till Jan or max by Feb ( backed by the visible earnings picking up) and triggers selloff around early 2019. All in all we are staring at an imminent correction.
Some are even predicting 80 INR for a $ by year end…then the real panic button will be pressed by FPI/FII…will it give once in a lifetime opportunity to build solid PF…or we can also tumble under pressure…only time will tell…who are the right timers in timing the market…
That is, to say, INR/USD is trading at 70.08 as I’m writing this. India’s ‘Real Interest Rate’ (India’s Prime Lending Rate net of Inflation) is about 4.5%. The Real Interest Rate in the US is 3%.
It means that, theoretically, the pair is expected to move to 70.08*(1.045/1.03) = 71.10 within this year. So, the only way the pair would move to 75 or 80 is if:
India drastically increased its interest rates (or) if Inflation in India drastically fell (or)
US drastically reduced its interest rates (or) if Inflation in the US drastically rises
I think #1 is more likely, although I don’t think anything ‘drastic’ can happen. #2 is not very probable, given the Fed’s stance. If Fed further tightens interest rates and the RBI isn’t as responsive (It’s tricky, because the Inflation target is under control, so there’s no saying what their stance is), INR is expected to appreciate.
Of course, all of this is assuming that the Forex market is operating in a rational manner, which it may not be.
The formula is Domestic Exchange Rate * (1+(Domestic Lending Rate - Domestic Inflation Rate))/(1+(Foreign Lending Rate - Foreign Inflation Rate))
So, assuming US’ Real Inflation Rate stays constant (Which I think is a good possibility), for INR/USD to reach 75-80, either India’s Lending Rate has to spike or India’s Inflation has to decrease. That is to say, given that the denominator stays constant, the numerator in the equation has to get bigger.
A practical explanation is that, if India rises Interest Rate, it signals the onset of Inflation. Alternatively, the RBI could think that the Inflation is under control, but it could actually be rising. Either way, at the cue of Inflation, the related currency is seen as weak.
Indian Importers will be asked to pay in USD and Indian Exporters will be asked to accept in Rupees. The net effect is a depreciation of the Rupee. I’m making a really simple case here. Obviously, the economic machine is far more complex that what I’m trying to explain.
I think, it’s unable to break out of the 650 range due to lack of volume which is in-turn due to the market sentiment or other factors that market is aware of.
acrysil has a lot of support built up , first in the 520 to 530 range and then the breakout gap should act as a support…
given the fundamental change reflecting in the numbers finally after 3 long years, it should be interesting how it will be…
i am fully invested and didnt take profits, then again i hv maxed out here with 10percent of my pf, so wont add anymore
Persistent now looking ready for a breakout,volumes on Tuesday we’re pretty high. Closing above 870-875 with good volumes can confirm the breakout. I’m just worried about the long upper wick that was formed on Tuesday. What’s your take?