The rains have been giving everyone a shiver now with its constant delays. Even the government is scared now and no doubt they have made provisions in their budget if the rains fail to set in the country on their normal course. The rains have been delayed but we still have 2 months to wait and watch. It may so happen that the rains may completely surprise us after entering in mid or late July. It does happen and it has happened in the past history of India before that the rains have entered in mid or the last week of July and has completed its quota to the satisfaction of everyone. Right now what we are facing is a high pressure zone over the land mass which means the clouds that are being pushed back towards the sea. There does not seem to anything to worry till 20th of July. But yes if the rains do not come in by then, that means we are facing a big problem wherein the rains would be 60% of the normal rains that the country receives annually.
For last 15 days it would have been a good time for traders who had been short in their crude oil positions. I remember mentioning in one of my articles that, be prepared for a fall in crude oil prices and I hope I have kept my words. Crude had finished its rise at $74 on 11th June. After that no doubt it did try to again rise to that level from the low of $66.37 to make a high of $73.38 on 30th June. That day itself it gave up and ended up closing at $69.89 down $1.65. And after that I doubt the crude oil price have seen the rising sun. It was setting down and further down for 7 continuous trading sessions to end up at $59.25. The question that now arises is- has the fall in crude prices ended? I would say not yet, it still has to continue its fall. But what needs to be seen is will it simply fall down from here onwards or will it give a slight pullback and then take a reversal. Remember crude prices have almost fallen down by $15. So as far as the physcology of the market goes it should take a break, let the prices rise a bit further and then fall again. And this will be the last phase of its fall, because after this my dear investors, crude will never see these low prices again for a long time to come which I would say long long years to come. This week it will be the time when we will have to observe till what prices does crude give a pullback and then we decide if we really want to sell further. Because when the prices are in the last phase of their fall it is will be very difficult to know when the prices will take a reversal. As I see it, they should be around the price range of $55 and $48 for next 2-3 weeks or maybe 2-3 months.
By the end of august the hurricane season in the USA will hit the country and we will have to wait and watch if anyone of it hits the country and what kind of damage it may cause. Because august and September are the months where crude oil is at very wild rides and a slight here and there in the weather out there can take the crude prices to any heights. But for that reason I said it may range between $48-$55, which I feel maximum may go up to $60. Trading during those times is a bit risky as the prices are simply news driven and not the fundamentals. To be put in a very simple manner now is actually a wait and watch time in crude and if the prices give a pullback then it would be the last opportunity to sell again in the market. If the pullback does not come in then it is better to stay away and not sell as the stop losses will be at really high levels which do not justify the targets. Incase if the pullbacks come in then it may come to the levels of $64 and at such levels it may be advisable to wait for a day or two and if the price of $64 is not breached for 2 continuous days then a risk of selling can be taken with your stop losses limited to around $ 66.35 on closing basis. Please do not tempt yourself to taking a buy position if the markets are showing a sharp rise in the prices. Have a happy week trading and a happy week making profits.
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