The Markets gained around 2 pc overall for the week. They tested the resistances of 5378 and retreated back. These are very key levels for the markets.
1. In the last rally in Feb-March, the markets hovered in the rage between 5300-5400 before breaking out. I expect the same to happen this time.
2. Looking at the wave counts we are in the C leg of rally from 4532. Just to recap, C1 was 4770 - 5348.
C2 was 5348 - 5032
C3-1 was 5032 - 5378 = 346 points
We should now in C3-2 wave which should test 5246, 5205 or 5164. Only below 5100 would did this entire rally be terminated.
The rally of C3 would be decisive as usually the 3rd wave would be the most powerful. This wave has targets of 5610 and if 5629 is broken then 5766.
What should be the strategy?
Buy on all dips, preferably closer to 5200 with part booking around 5600.
The monsoons have picked up and the drought is not going to be as bad as was previously expected. Surprisingly, the markets have performed well in the years where there has been poor monsoons in the last one decade,
At current market levels, the PSU banks are a dark horse. Some of them are available of a dividend yield of around 6 %. Even if their bad loans increase, they will still be able to pay out dividend which was paid in the previous years. This is because dividend payout has been 25-30 pc of entire profits and the government expects the dividend income from the PSU banks.
The Sugar sector and the PSU banks are amongst my favorite themes currently.
1. In the last rally in Feb-March, the markets hovered in the rage between 5300-5400 before breaking out. I expect the same to happen this time.
2. Looking at the wave counts we are in the C leg of rally from 4532. Just to recap, C1 was 4770 - 5348.
C2 was 5348 - 5032
C3-1 was 5032 - 5378 = 346 points
We should now in C3-2 wave which should test 5246, 5205 or 5164. Only below 5100 would did this entire rally be terminated.
The rally of C3 would be decisive as usually the 3rd wave would be the most powerful. This wave has targets of 5610 and if 5629 is broken then 5766.
What should be the strategy?
Buy on all dips, preferably closer to 5200 with part booking around 5600.
The monsoons have picked up and the drought is not going to be as bad as was previously expected. Surprisingly, the markets have performed well in the years where there has been poor monsoons in the last one decade,
At current market levels, the PSU banks are a dark horse. Some of them are available of a dividend yield of around 6 %. Even if their bad loans increase, they will still be able to pay out dividend which was paid in the previous years. This is because dividend payout has been 25-30 pc of entire profits and the government expects the dividend income from the PSU banks.
The Sugar sector and the PSU banks are amongst my favorite themes currently.
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