What explains the sharp selling in the Nifty…?
The Nifty showed signs of getting closer to the 10,500 mark during the week but closed below the 10,200 mark. The selling in the last 2 days was quite hectic taking the markets down sharply. What were the key triggers? Continue reading “Nifty Panic”
What could be the immediate outcome of this move…?
In the aftermath of the PNB fiasco over the issue of fake Letters of Undertaking (LOU), the RBI decided to ban further issues of LOUs and Letters of Comfort (LOC). However, this move will be with prospective effect which means that all existing LOUs and LOCs will be fully honored. However Letters of Credit (LC) and bank guarantees will continue for international trade finance and there will be no change on that front. But first, what exactly is this PNB fiasco? Continue reading “Ban on LOUs”
The CAD is a lot more worrisome than the trade deficit
During the week the trade data was announced wherein the trade deficit came in sharply lower at $12 billion. This is in comparison to $16 billion reported in the month of January. Even the growth in exports of goods was sharper than the previous months while the growth in imports were slower. But the real worry was not on the trade deficit front. The real worry was on the current account deficit front. Here is why the CAD really matters Continue reading “Current Account”
If you have seen a trader or an analyst sitting and concentrating over a screen full of complex charts and trend lines then it is highly likely that the person is doing technical analysis. What exactly is technical analysis? It is the study of charts and patterns of price and volumes of stocks to extrapolate future trends. Technical analysis is based on 3 fundamental premises Continue reading “Technical Analysis of Stocks – What it means”
IF YOU ARE A TRADER IN THE STOCK MARKETS THEN TRADING COST IS AN EXTREMELY IMPORTANT FACTOR DETERMINING THE ECONOMICS OF THE TRANSACTION! WHEN WE TALK OF TRADING COSTS THERE ARE VISIBLE COSTS AND INVISIBLE COSTS. THE VISIBLE COSTS INCLUDE THE BROKERAGE, STT, GST, STATUTORY CHARGES, STAMP DUTY ETC. THERE ARE INVISIBLE COSTS LIKE LIQUIDITY PREMIUM, COST OF BID-ASK SPREADS, COST OF DELAYS IN EXECUTION ETC. IF YOU ARE A TRADER THEN YOUR FOCUS MUST BE TO KEEP ALL THESE COST AT THE BARE MINIMUM TO KEEP YOUR TRADE MEANINGFUL Continue reading “Trading Rule – “Never ignore the impact of trading costs””