i Develop Stocks Advisory

On the cross roads Tomorrow being a holiday profit booking was on the cards after the heroics of yesterday. Profit booking and some unidirectional global cues made the market volatile and the session was very choppy indeed. The premium in the nifty although suggests a different story it might be that few bears have cut their short positions. As mentioned in the earlier edition the oil and gold prices have started to retrieve the markets may heave a sigh of relief as this might help to stem the inflation expectations which are the major concern in the short run. The major concern here is on one side the RBI and the Government is talking about inflation control and on the other side it is not allowing the rupee to appreciate. The rupee appreciation is very much required for controlling the inflation, although one might argue that our trade deficit is high on higher oil imports and reducing exports, which doesn’t warrant for any rupee appreciation. But we are here not talking about 35 levels but only speaking about 38-39 levels which would put less burden on oil imports which will directly affect the oil subsidy. In short run there may be problem of inflation and higher commodity prices but one can also consider one fact that the trends in the US might reverse soon in the second half of the year. This can lead to a huge rally in the global equity markets. Therefore all the investors who are holding on to their portfolios must not be bothered about the short term problems prevailing in the market. "A very popular error - having the courage of one's convictions: Rather it is a matter of having the courage for an attack upon one's convictions."