market outlook in this week (22-09-08)

1. Global financial crisis may not be solved by the 800bn$ rescue operation! According to the analysts we are going to see more bankrupts/bailouts in US. Government may not buy all the companies and also the problem is that the current prices of mortgages are slipped drastically. So, defaults are much more, by knowing this US govt. put the ‘ban on shorting the financials’. Even this 800bn$ will contribute less than the 8% of total mortgage market and also it will be used within the two year period. So, if much more defaults happen then the real picture will emerge.
2. As crude rises our domestic problems again in a bumpy road
3. Our economy is now going with huge fiscal deficit government still giving various subsidies due to the upcoming elections
4. Global EMs and BR_C equities are trading around 10 price multiple but whereas India trading at 18 PE (Nifty)
5. FIIs are not pumping funds to India they are just withdrawing as much as possible, so no inflows in the near term
6. Due to high interest rates Q2 margins are going to shrink further and will make Sensex/nifty much costlier.
7. History tells us that bear markets lasts more than 14 -36months means we are just 9 months old and still valuations looks very highly valued means we are going to break the 3800 in the near term.

So, no need to go panic for bottom fishing.
market ourlook for this week;
There may be a gap up opening on monday (not above the nifty 80points) and use this up move to go short.
T1:4150
T2:4070
T3:3975
But, better to book profits 50% at T1 and 25@ at T2&T3. The stiff stop loss should be observed at 4450.

with thanks
be and make