Home > Macro Trends, Market View > Rupee breaches 40 level

Rupee breaches 40 level

Thursday, September 20, 2007 Leave a comment Go to comments

A new wave of downtrend has started in dollar vs the rupee. Read this update. I wish RBI had allowed currency trading in India!Next stop for rupee is 39.5 and the next one is 38. please check my earlier posts on rupee dollar in the currency section.

Yesterday was a good time to get out of large cap IT stocks as every cat and dog was rising.

Next stop of Infosys could be 1700-1750. If you want to take a countertrend trade, you can consider that! TCS, 950 looks possible.

Categories: Macro Trends, Market View
  1. sagecapital
    Friday, September 21, 2007 at 10:39 pm

    Rey- you have a valid point.(especially point 2)
    BSE Dollex 100 which tracks dollar returns has gone from 1620 to 2160(33%) whereas BSE has gone from 13860 to 16350 (18%) in a year. So FIIs are earning almost double returns !
    I cannot say when “crash like situation shall happen”.All I know that I won’t be able to sell at the peak.
    Thats why I am requesting investors to keep their feet on the ground and “remain in control”.
    But I feel, there shall flow of money from US to other countries. It doesn’t make sense for a non US investor to be invested in US markets. Even if the market goes up but dollar value falls, your returns are not spectacular.
    And thanks for clarifying mystery behind hart’s winners and losers 🙂

  2. ReyMax
    Friday, September 21, 2007 at 10:11 pm

    Cant debate much on subjects like Economics, Liqidity etc etc. One thing though is sure…..

    If Petro Rich countries are sucking additional $ 20 per bbl and adding to their liquidity, those paying that additional $ 20 are losing that liquidity. So, net liquidity remains the same.

    Coming to the point why fiis will pullout!

    Remember yr fan ‘hart’? He has not lost any money on the stock market on any trade!

    Well it is so because he does not sell stocks which are down. You lose money only when you sell the stock. (Those who hold on to losing stocks call themselves Long Term Investors). It is true, Hart may not have made a single losing trade.

    Simillarly, you dont make money till you sell the stocks which have gained value. fiis want to make money and fiis normally sell when both the following conditions are met, namely

    1. Strong Rupee

    2. Enough euphoria, drummed up by motivated positive sound bytes, so that they can get suckers to
    buy what they are offloading at peak values.

    For me, its time to raise the “CRASH ALERT FLAG”.

    Above is just a naive opinion from somebody who does not make a living off the stock market. It could be as wrong, as it is right.

    Please keep up your good work. Your sincere approach is very refreshing.


  3. sagecapital
    Thursday, September 20, 2007 at 8:45 pm

    What do you think will make them “pull out”?
    Now the interest differential between US and India is even greater plus the added benefit of dollar weakness.
    Where do you think will all the “petro dollars” go-the crude is now at $80+?
    The world is again going to get excess liquidity.

  4. ReyMax
    Thursday, September 20, 2007 at 7:01 pm

    Another perspective.

    A lot of fii money came in with dollar to Rs @ 47 abt 2 years ago.

    Apart from making what fiis have made in stocks, they hv made additional 17% for their money by exchange rate as well.

    In fact, this to me is a great pointer that fiis are getting ready to pull out. I give them maximum 30 days.

    So watchout, Oct and Nov.

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