Posted By : Kishore B.S
Hi Friends !!!
The markets yet again failed to cross the resistance level of 4946 yesterday inspite of the GAP up opening. The depreciation of the Rupee to the lowest in lifetime of Rs. 55.39 led to the fall coupled with the Downgrade of Japan by FITCH rating agency.
Yesterday fall was highly dramatic and without any support at any of the lower levels, the positive Euro markets also failed to provide with any support to the sliding indices due to the havoc created over the Falling Rupee.
Once again the Rupee depreciation has come to the forefront as a cause to downgrade the Indian Indices, and also it has brought to light the inability of the RBI and failure of the Govt to prop up the same with any likely actions. The silence of the FM and RBI to show any concern to the faltering Rupee comes as a surprise to most of the Analysts and traders and the Nation at Large. The Appreciation of the Rupee by nearly 18% in the last one month and around 25% in the last 8 months comes as a solid investment idea with Huge returns compared to the Indices with negative returns of 14% in the last one year.
The charts below are pointing out to the fact that the resistance line was not breached and hence the retracement, and now it indicates the prominence of the support line in the form of the upper range of the Downward channel which should not be breached.
Which if broken could lead to the drifting of the indices further down to the 4640 levels in the days to come and if the support is held could see the Indices rally to the 5080 levels. It is needless to say that this direction would be decided by the Rupee and the European meeting scheduled for today which could either be favourable to the bulls or the bears and advisable for us to follow the direction set forth by them.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)