HBJ Capital Successfully Predicted Market Movement During Last 3 Sessions; Team Says, “Expect Market To Fall On Friday”.

HBJ Capital Report.... (Market Update for Friday, Sept 5th)
[Publisher of "10in3" (Small Cap with 10 times in 3 years potential) Equity Research Report & "Street Smart" (Lots of Investment Ideas) Newsletter]
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Market Wrap-Ups:-
Asian Stock Market = Down 1%; European Stock Market = Down 2.5-3%; US Stock Market = Down 2- 2.5%.

• Tracking weak Asian markets, equities opened on a negative note on the major Indian bourses this morning. A few front line stocks managed to buck the trend but the premier indices Sensex and Nifty traded in the red right through the session as every small rally was followed by a strong round of selling.
• Market participants appeared wary of building up positions ahead of release of inflation data and the outcome of the crucial Nuclear Suppliers Group meet today.
• The markets ended lower on Thursday on renewed fears of global slowdown. The benchmark BSE Sensex lost 1 per cent, or 150 points, to close at 14,899 levels. The broader benchmark Nifty dropped 1.25 per cent to 4447 levels.
• Huge build up at 4600 call, Nifty Sept premium widens. Significant amount of call buying was observed at strikes 4400, 4500 and 4600, Huge build up of positions (10 lakh shares) at 4600 strike signals any positive development on the global market front may boost Nifty to 4600 levels.

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HBJ Capital’s View for Friday and Next Week:-
If you look around & watch TV, listen to analysts, all are either expecting Indian Market to move up or even saying gaps up opening for friday. But at HBJ Capital, our 12 member srong dedicated research team is expecting Indian Stock Market to fall 1-2% on Friday, Why?

>>>>>From the bottom of 4200 last week, market has moved up 250 points in a matter of 3-4 trading sessions, no specific reason as such except fall in crude prices which is more a sentimental issues then real until crude falls below $100 or $85-90 range. Once again we would say too much too early gain, inspite of not good global clues. Market has mostly ignored bad news.

>>>>>If Inflation has come down a bit then at the same time we got stuck at NSG issue, so both are not going to affect market movement at least for time being.

>>>>>Global slowdown will dictate the market direction in near terms, today Nifty’s September futures commanded a premium of 10 points, indicating that players are creating long positions. But when market opens tomorrow, all these long positions are going to be closed mostly in the 2nd half, lead to further fall in the market. Indian Stock Market might open with say 1% down but it will further fall and may close at 2% down.

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Tell me HBJ, What a trader should do on friday?

>>>>>For those holding no position in Nifty: SHORT Nifty if it opens 1% or less downside, it is expected to fall further, don't forget to close the position on the same day.

>>>>>For those holding long/short position in Nifty: Long position holders should close their position anywhere between <= 1% Nifty fall; Short holders should hold and book profit at the end, just before close of market. --------------------------------------------------

Local Scenarios:-

• Rupee was depreciating against dollar and is expected to test 44.5 and 44.65. It has support at 44.15 and 43.95.
• Crude is still above USD 108 and news on Hurricanes, may cool down in coming days has minor support at USD 107.5
• Inflation fell for the second week in a row to 12.34 per cent as many food products, including fruits and vegetables, turned cheaper, prompting Government to say that its efforts seem to have started yielding results but RBI hinted at continuation of its tight monetary policy.
• The US today said "steady progress" was being made to rope in NSG members to end India's nuclear isolation as some countries insisted on inclusion of a specific commitment in the draft waiver for stopping nuclear cooperation if New Delhi conducts an atomic test.
• Raising their concerns at the two-day Nuclear Suppliers Group's meeting here, some countries felt India could use the NSG exemption to further its military nuclear programme with suggestions being made for changes even in the revised draft waiver placed by the US before the 45-nation cartel.

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Global Scenarios:-

• Crude Update: A barrel of light sweet crude fell 60 cents to $108.76 cents to on the New York Mercantile Exchange.
• Wall Street tumbled Thursday on more disappointing economic news -- retailers posted sluggish back-to-school sales reports and the government said the number of workers seeking unemployment benefits spiked last week. The Dow Jones industrials fell more than 200 points.
• The number of newly laid off workers seeking unemployment benefits jumped unexpectedly last week, the government said Thursday, reversing three weeks of declines. The increase indicates that the slowing economy is taking its toll on the job market.
• The unexpected jump could foreshadow more rough news for the job market on Friday, when the Labor Department reports monthly unemployment numbers. Economists expect the department to say that employers eliminated 75,000 jobs in August, which would be the eighth straight month of job cuts.
• While the U.S. gross domestic product grew at a healthy 3.3 percent clip in the April to June quarter, many analysts expect the economy to slow and possibly contract later this year, due to rising unemployment and slowing economies overseas.

- HBJ Capital Team.