The Nifty closed about 3 pc lower for the week. After a massive 1000 point rally from 5118, the index seems to be cooling off as the breadth becomes narrower and narrower.
1. The news flow seems to have been exhausted for the markets. After the rapid movements of August and early September, the indices are cooling off which is a good sign.
2. From here, where the markets can be anybody's guess. There are 3 options:
a. Straight up from here (Least Likely)
b. Correct to 5500 levels and then rally up
c. Continue with the long term correction.
Options b and c have equal likelihood of occurring.
3. If it is just a correction, targets are 5751, 5630 (significant number) and 5510. Below 5323, we could conclude that the rally is over.
4. Fundamentally, nothing has changed. In fact the rupee has strengthened and is now at a level where exports are competitive and imports not as expensive as 68.
5. All fresh buying should be held back till we hit slightly lower levels or if previous highs are taken out.
6. The Results season will again dictate the market direction. The Q2 Results will not be very good for many companies (except IT companies). This is because the maximum brunt was felt in Q2.
7. The FIIs flow while they have been positive, they have been buyers in small quantities.
The markets seem to be in for a quiet time. Maybe, the lull before the proverbial storm.
1. The news flow seems to have been exhausted for the markets. After the rapid movements of August and early September, the indices are cooling off which is a good sign.
2. From here, where the markets can be anybody's guess. There are 3 options:
a. Straight up from here (Least Likely)
b. Correct to 5500 levels and then rally up
c. Continue with the long term correction.
Options b and c have equal likelihood of occurring.
3. If it is just a correction, targets are 5751, 5630 (significant number) and 5510. Below 5323, we could conclude that the rally is over.
4. Fundamentally, nothing has changed. In fact the rupee has strengthened and is now at a level where exports are competitive and imports not as expensive as 68.
5. All fresh buying should be held back till we hit slightly lower levels or if previous highs are taken out.
6. The Results season will again dictate the market direction. The Q2 Results will not be very good for many companies (except IT companies). This is because the maximum brunt was felt in Q2.
7. The FIIs flow while they have been positive, they have been buyers in small quantities.
The markets seem to be in for a quiet time. Maybe, the lull before the proverbial storm.
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