The RBI action, The Crude bubble, DOW and Nifty

(Image No # 2)

So, finally Nifty bridged the GAP.....When Nifty Fut was at 4530 and I said 4250, it was difficult to visualize that 4250 is possible.....But then thats how markets behave.....A strong resistance is always difficult to break when you hit it.......Imagine a cricket ball hit against a wall......What will happen??? The harder you hit it, the stronger will be the rebound.......Same theory is applicable in stock market.....Either throw the ball over the boundary, ie. the index crosses the resistance with a GAP up or else it falls down.......

Now that RBI has come up with stringent credit policy, Nifty went down to its next lower support at 4150-75.......Now, the market gurus have concluded that Indian Growth will be hampered......Some say, HAWKISH CREDIT POLICY......Well, true.....looks hawkish....But then this is for a better growth story of India.......If RBI wants credit growth to come down to 15-16% from the current 20%, that means, they do not want bad credits in the market.....This will only help banks to lower their NPA's......Is that bad for the market??????? Low NPA's and lower credit growth means that money will be in hands of the people who can actually drive the India Growth Story.........Its really a food for thought......

Now, lets come to Crude story......Today I had told some people that if crude hits 125.7, a sharp fall.....Why? Well, again the same cricket ball theory.......Though here the support itself became a resistance when crude went below that.....Now, if crude stays below 123-125 (Image No # 2), a fall to 110 is inevitable......But above 126, it can again spurt up to 128, 131......Which will come first....Well, I really cannot speculate........Dow, so long remains above 11100 can make an short term upmove just because doing that, it continuously remains above the current down channel......

Coming back to Indian Market.......yes its true that we are still in a bearish down channel but seeing the expiry on thursday, a recovery is on the cards to 4300-50 levels.......Will update my views tomorrow.......