I was away from the blog for two days, deptived of the excellent comments that come after each post. I hope to resume my posts, starting now.
Sector Watch : Steel
The World Steel Association forecast on Monday that steel demand would tumble 15 percent in 2009, its steepest fall since World War Two, and one exacerbated by consumer destocking. Arcelor Mittal, the world's largest steel producer, announced results that had larger losses than expected. American producer, US Steel reported Q1 2009 results that were significantly below market expectations. The company said it also expected a loss in Q2 and that it was difficult to forecast further out.
Now, Tata Steel has reacted to the gloom in Steel, seeing its price fall from 299 to 238 in 15 trading days. This also tells us that the Indian markets are coupled with international markets. Steel, then is no longer a 'buy on dips' candidate. It should normally be a 'sell', but we are seeing strong upside momentum in the market, so we should avoid going short, just stay away.
The Nifty remains inside a trading range between 3350 and 3500. After all the intra day action of going down, then going up, we are still inside the range. With four days of holidays, anything can happen when the markets open on Monday.