The markets closed about 2.6 pc higher for the week. It has finally broken out of a range and looks to be moving ahead. Let us look at the factors which can move the markets in the coming weeks.
Fundamentally:
1. The Government seems to be showing signs of moving out of policy paralysis. The PM taking over the Finance Ministry and seeming to reverse key prickly issues like the Vodafone Tax case and a re-look at GAAR. This will boost FII sentiment.
2. The crude oil prices are hovering between 95-100 dollars a barrel. The Petrol prices in Mumbai have already come down by about 5.5 rupees post the hike by Rs 7.5. Further strengthening of the rupee will leave scope for further reduction in petrol prices. Every 1 rupee strengthening of the rupee against the dollar should lead to a drop in petrol prices by out 0.74 p
3. Monsoons hold the key. Monsoons have been deficient so far. If the trend continues then the markets may witness a fall. It has been observed that for the past few monsoons are delayed by about 15-20 days. The monsoons start late and end late.
Technicals:
As per Elliot, the entire move from December 2011 can be categorized ito 3 legs A, B and C.
1. Leg A was 4532 - 5629 an up move of 1097 points. It was corrected by B leg down to 4770. B corrected A by 78.4 pc.
2. Leg C can extend anywhere between 5447 to 5867.
3. Leg A took approx 2 months, Leg B consumed about 3.5 months. Leg C should consume about 2 to 3.5 months. This up move should end in the time span of about August beginning to about mid-September 2012.
4. The area between 5094 and 5150 will act as strong support now.
Conclusion:
The Strategy now should be to go long on all dips with a stop loss of 5094 and a target of 5450-5850. After 5450, one commence part booking of profits once the markets cross 5450 levels. 1 strategy could be booking 10 pc profits for every rise of 50 points from 5450. By this strategy one would have liquidated the portfolio by 5900-5950 which forms the upper limit for this up move.
For those interested in individual stock picks, I have Lakshmi and my picks
Fundamentally:
1. The Government seems to be showing signs of moving out of policy paralysis. The PM taking over the Finance Ministry and seeming to reverse key prickly issues like the Vodafone Tax case and a re-look at GAAR. This will boost FII sentiment.
2. The crude oil prices are hovering between 95-100 dollars a barrel. The Petrol prices in Mumbai have already come down by about 5.5 rupees post the hike by Rs 7.5. Further strengthening of the rupee will leave scope for further reduction in petrol prices. Every 1 rupee strengthening of the rupee against the dollar should lead to a drop in petrol prices by out 0.74 p
3. Monsoons hold the key. Monsoons have been deficient so far. If the trend continues then the markets may witness a fall. It has been observed that for the past few monsoons are delayed by about 15-20 days. The monsoons start late and end late.
Technicals:
As per Elliot, the entire move from December 2011 can be categorized ito 3 legs A, B and C.
1. Leg A was 4532 - 5629 an up move of 1097 points. It was corrected by B leg down to 4770. B corrected A by 78.4 pc.
2. Leg C can extend anywhere between 5447 to 5867.
3. Leg A took approx 2 months, Leg B consumed about 3.5 months. Leg C should consume about 2 to 3.5 months. This up move should end in the time span of about August beginning to about mid-September 2012.
4. The area between 5094 and 5150 will act as strong support now.
Conclusion:
The Strategy now should be to go long on all dips with a stop loss of 5094 and a target of 5450-5850. After 5450, one commence part booking of profits once the markets cross 5450 levels. 1 strategy could be booking 10 pc profits for every rise of 50 points from 5450. By this strategy one would have liquidated the portfolio by 5900-5950 which forms the upper limit for this up move.
For those interested in individual stock picks, I have Lakshmi and my picks
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