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INTRADAY CALLS – 16/09/08

LEHMAN GOES DOWN UNDER  – WHAT NEXT

 

DOW JONES  HAD THE  WORST FALL SINCE 2001 AND WENT BELOW 11000 TO CLOSE AT  10918, THE LOWEST LEVEL FOR THE DAY LOSING 504 POINTS.  WITH LEHMAN FINDING NO TAKERS  WITH $613 BILLION DEBT AND MERILL LYNCH RUNNING FOR COVER UNDER BOA THERE WAS TOTAL LACK OF CONFIDENCE IN THE INVESTMENT BANKS. INDUSTRIAL PRODUCTION FELL 1.1% IN AUGUST AGAINST EXPECTATION OF .5% ADDED TO THE WOES. INSURANCE GIANT AIG IS STRUGGLING TO RAISE FUNDS WITH FED NOT INCLINING TO COMMIT WORSE IS NOT YET OVER. ANY CREDIT RATING  DOWN GRADE WILL MAKE ITS SURVIVAL DIFFICULT. THE REMAINING TWO LARGE INVESTMENT BANKS MORGAN STANLEY AND GOLDMAN SACHS THOUGH NOT EXPOSED AS MUCH TO TROUBLED MORTGAGE ASSETS WILL  FIND  IT DIFFICULT AFTER THE FALL OF LEHMAN.  DOW JONES IS EXPECTED TO FALL FURTHER TO 10700 OR EVEN 10500 IN THE SHORT TERM.  ASIAN MARKETS TUMBLE SINCE OPENING AND NOW NIKKEI IS DOWN BY OVER 600 POINTS AT THIS TIME.

NO CHART WAS NEEDED TO PREDICT THE NIFTY`S FALL YESTERDAY. NIFTY FUTURE OPENED LOWER AT 4092 AND FELL TO 3957 AROUND NOON AND RECOVERED ON SHORT COVERING TO THE DAY`S HIGH OF 4100 AND CLOSED AT 4050 WITH THE NET LOSS OF 167 POINTS.

NIFTY FUTURE SUPP LEVELS 3980,3959,3853 RESIST 4070,4100, 4318. WE EXPECT NIFTY TO FALL FURTHER AND  IT MAY TEST THE EARLIER LOWS.  WE SUGGEST MINIMUM LONGS AROUND 3800 LEVELS. AVOID SHORTS ABOVE 4100 LEVELS FOR THE DAY. AS WE EXPECT SELLING FROM FII`S TO CONTINUE  WE MAY NOT SEE ANY SUBSTANTIAL RALLY IN THE SHORT TERM.