Nifty July Futures - Important Levels for Wednesday, 17.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower side is 5965.  Below this, next important level is  5940ï.. (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels on Higher Side is  5995.  Above this, next important level is  6025. (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).

Stock Tips For Wednesday, 17.07.2013.
Larsen & Toubro (LT)  :  :  Sell This Stock Near  975-980.  Stop Loss  985.   Targets: 972, 968, 964, 960, 956.(Break-Out Levels:  While this stock is moving up, Buy Above 980 and Above 985.  While this stock is falling down, Sell Below 972.  Trade Near the Given Break Out Levels to Earn Some Sure Shot, Quick & Small Profits)

RBI Measures and Investor Takeaways

The Event:
The RBI yesterday has announced various measures from perspective of managing external account and rupee volatility. These are as follows:
1. Hiked marginal standing facility (MSF) rate by 200 bps to 10.25%. This is the penalty rate at which banks can borrow over repo rate (was at 100 bps over repo so far).
2. Restricted borrowing under LAF to 1 percent of NDTL or approx INR 75,000 Crs.
3. Will conduct OMO sale (sell securities to market and mop up liquidity) of INR 12,000 Crs on July 18.
Impact:
The intent seems to be to tighten INR supply and hike carry cost in order to stabilize the currency and possibly to attract yield chasers to domestic market. However, near term impact could be quite disruptive. Call rates may over a period of time rise towards the MSF rate and yield curves should get significantly inverted. OMO sales will create additional government bond supply in environment of tight funding costs which should cause yields to rise. Finally, corporate bond spreads may potentially widen significantly as market may start worrying about liquidity in these assets. From a banking system perspective this sets back the whole transmission process. Banks had just begun reducing base rates further on prodding by the finance minister. This will leave them severely scratching their heads.
Implications:
The move clearly shows that RBI is out to achieve financial stability at the cost of everything else. It is indeed quite significant that it has chosen to take these measures (which effectively significantly tighten cost of funds) in an environment where growth is so weak. However, unlike an explicit rate hike, the method adopted allows flexibility to revert to earlier scenario almost overnight, once the central bank judges external risks to be manageable.
While a short term disruption is to be expected due to these measures, they also create a large medium term opportunity for bond funds. This is because the measures undertaken are bound to create a substantial drag on growth in an environment where growth is already weak. Also, it should substantially improve valuations on the curve thereby making the bond play that much more attractive once these steps are reversed. Having said that we would in all probability want to wait and watch in the near term till the market stabilizes.

Nifty July Futures - Important Levels for Tuesday, 16.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower side is 6010.  Below this, next important level is  5990. (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels on Higher Side is6040.  Above this, next important level is  6075-85. (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).
Stock Tips For Tuesday, 16.07.2013.
Reliance  :  :  Buy This Stock Near  893-889.  Stop Loss  885.   Targets:  896, 900, 904, 908.(Break-Out Levels:  While this stock is moving up, Buy Above 900.  While this stock is falling down, Sell Below 885.  Trade Near the Given Break Out Levels to Earn Some Sure Shot, Quick & Small Profits)