MY OPINION

Come Tuesday RBI is to announce credit policy. Will be any rate cut or will leave unchanged?

To my understanding inflation, growth and money supply will be key concern for interest rate determination. When inflation was peak at 14%, RBI started cutting rate. Now inflation is on south ward move. But last week it turned upside and it was only due to trucks strike and beyond this I could not see any factors which would raise inflation. So I feel this week inflation will come down.

And RBI will to some extent only use the monetary options to tackle inflation. For economy growth also needs monetary actions. In that point of view, growth is slowing down; to revive it we need credit growth, which will be increased by rate cut.

As for as money supply concern, they are in a position to increase money supply only, and not curb it. Again needs rate cuts.

By and large I feel RBI will leave rates unchanged.

MY VIEW

NIFTY LEVEL

Tomorrow, credit policy will give direction. I prefer selling at higher levels.

Res 2714, 2846

Sup 2635, 2524

TOMORROW TIPS

SBIN

SBIN posted good result. But technically to my knowledge in chart I think ascending triangle pattern is forming and breakout will be downside. And tomorrow RBI is to announce credit policy, whatever may be announcement, according to chart I feel we should sell at every rise. It may touch 926,754 levels in short term.resistant at 1134.

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