The markets had a pretty dismal week. They closed down 2.4 pc for the week. What was more worrying that individual stocks took a bigger battering than the index. The index fall of 2.4 pc does not represent the true picture.Let us examine the technicals and the fundamentals governing the markets.
Technicals:
We are in leg C of the corrective up move.
C-3-1 was 5032 - 5448 = 416 points
C-3-2 can be retraced till 5289 (already done), 5240 or 5191. In the worst case we may see a dip till 5150.
We are currently testing the support line from the bottom made at 4770. This support line will act as a level from which the markets may bounce back.
We can say that the current down move is over only after a close above 5400.
Fundamentals:
The good rains in the month of August mean that the Monsoons are no more an issue.
The Parliament logjam over the coal issue will continue for the next week. After September 8th, if there is a Diesel price hike and reforms take place, then the markets should rally.
The proposed changes over postponing GAAR changes all hint to a positive change from the Finance Ministry.
The strategy now should be of wait and watch. Buy only on dips around 5150-5200 levels and buy high dividend yield stocks which provide one with a margin of safety.
In the early part of next week, I will do a feature on how September has been for the markets in the past 10 years.
Technicals:
We are in leg C of the corrective up move.
C-3-1 was 5032 - 5448 = 416 points
C-3-2 can be retraced till 5289 (already done), 5240 or 5191. In the worst case we may see a dip till 5150.
We are currently testing the support line from the bottom made at 4770. This support line will act as a level from which the markets may bounce back.
We can say that the current down move is over only after a close above 5400.
Fundamentals:
The good rains in the month of August mean that the Monsoons are no more an issue.
The Parliament logjam over the coal issue will continue for the next week. After September 8th, if there is a Diesel price hike and reforms take place, then the markets should rally.
The proposed changes over postponing GAAR changes all hint to a positive change from the Finance Ministry.
The strategy now should be of wait and watch. Buy only on dips around 5150-5200 levels and buy high dividend yield stocks which provide one with a margin of safety.
In the early part of next week, I will do a feature on how September has been for the markets in the past 10 years.
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