The testing times for the markets to keep afloat above 4000 level and the RIL has to trade above the 2050 level to see these things happen.
The ONGC has out performed in the current season and under no circumstances it shall trade below 840 levels to keep the faith in our markets. The up move triggered one week back has enough steam to take the Nifty to 4865-4935 level with out much strain. The market friendly policies and disinvestment announcements and easing of inflation will keep the FII’s faith in our markets.
The Nifty is likely to open with a gap down, has the first support at 4395-91 level and has the bullish momentum to recover the losses. The Nifty has the second support at 4360 level and the days best available at 4321-25 level. The Reliance results effect will decide the course of the Nifty Journey as the results published in the evening. The Reliance has support at 2285 level, incase it breaches then the support at 2230 and at 2205-08 level may spoil the chances of Nifty scaling upward. In case RIL stays above 2305 then likely to cross 2370 then to 2385 level and the upward push may take it to 2485-2525 level in the coming sessions.
The Stock Specific Action, Visit: www.intradaystockcalls.blogspot.com
Never Forget: I may be wrong, You may be wrong but markets always RIGHT.
Friday, July 25, 2008
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July 25, 2008
Whats Behind the Slide in Oil and Commodities?
by Gary Dorsch
On the morning of July 15th, the price of crude oil, the most widely watched commodity in the world, was gyrating in a narrow range, just above $145 /barrel, as dealers in London were position-squaring ahead of the Nymex opening. Just a few days earlier, Iran was conducting war games in the Persian Gulf and threatening to shut down the Strait of Hormuz, if attacked. The world watched a fireworks display of Iranian Shahab-3 missiles that were armed with one ton explosives.
In the background, the global stock markets were entering into bear market territory, having lost $13 trillion of value since their peak set last October. Soaring energy and key raw material costs were squeezing profits of manufacturers, unable to pass the entire cost increases onto consumers, who were themselves getting squeezed by soaring prices for gasoline, food and other basic necessities.
IndyMac Bank, a prolific mortgage specialist, was seized by federal regulators, in the third-largest bank failure in US history. Preferred stock sold by Fannie at $25 /share fell to $14 lifting its yield 13.50-percent. Lehman Brothers' preferred stock plunged to $9.50 /share to yield 20.8%, discounting its eventual demise. General Motors suspended its common stock dividend. Hedge-fund trader George Soros said the global banking turmoil is "the most serious financial crisis of our lifetime."
On July 15th, the Dow Industrials plunged 250-points in the first-hour of trading to an intra-day low of 10,825, extending its losses to 2,400-points, from eight weeks earlier. Where was the US Treasury's "Plunge Protection Team" (PPT) with its magical safety-net, designed to rescue Wall Street during moments of gut wrenching panic? "Helicopter" Ben Bernanke was handcuffed by a weak dollar and gold hovering near $1,000 /oz, and couldn't slash interest rates to rescue the market.
US consumer prices were increasing at a 5% annual clip in June, reflecting the global commodity boom that the Fed's rate cuts had set in motion. Then suddenly, at 10:30 am EST on July 15th, a miracle happened, the Nymex crude oil market began to collapse, plunging $10 per barrel within a span of less than one-hour, to its biggest daily decline in 17-years. What was behind the historic crash in the crude oil market on July 15th that prevented "Black Tuesday" on Wall Street?
A few hours later, at 11:30 pm EST, the Bush administration announced a shift in its foreign policy, and said it would send a high ranking envoy to Geneva, Switzerland to talk with Iran's diplomat directly, about Tehran's nuclear program. As long as the diplomatic game continues, there is less chance of any military action against Iran's nuclear weapons program. At a cost of one round-trip airline ticket to Geneva, Washington engineered a stunning 15% drop in world oil prices.
On July 16th, Nevada Senator Harry Reid fashioned a bill to rein-in speculators in the energy markets, who bet on the price of oil, but don't intend to take physical delivery. "This bill will address the rising cost of gasoline in the short term, and prevent Wall Street traders from gaming oil markets, and insure that American consumers are paying a fair price at the pump," Reid said. The bill would restrict the number of oil futures contracts an individual speculator could control.
Oil prices have tumbled more than $23 a barrel from their all-time high set on July 11th, marking the biggest decline in dollar terms in the market's history. The evaporation of the Iranian "war premium" from the oil market, rescued the Dow Jones Industrials with a "miracle rally" of 800-points, from the brink of Armageddon. But could there be another hero who is responsible for the historic slide in crude oil, besides the backroom cabal at the US State and Treasury departments?
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