The markets closed up 6.2 pc for the week to end at 5040. Let us look at what is in store for the coming week.
1. We have a short term low in place as the market cleared the previous high of 4965 quite comfortably and closed above it for the past 2 days.
2. This means the down move from 5944 is in its 4th wave up. Retracement targets could be 5110 (already done), 5230 and 5350.
3. 4th Wave is in three legs A-B-C. A may be done at 5114. B could end at 4964, 4917 or 4870. Only a close below 4870 indicates weakness.
4. Gold continues to rise and we should see a rise till about 2200-2400 USD. Gold is buy on dips till it hits the targets
5. The Gilt funds have started giving a monthly return of about 1 pc for the past 2 months. Time to add more funds in the Gilt funds after the RBI Meet on September 16th. Hike of 25 basis points is factored in, but I would ot be surprised to see a 50 basis points hike looking at inflation and the GDP numbers.
6. Trend line support comes at 4955-4965 again underlining the significance of this level.
7. On the upside we run into resistances in 5180 - 5200 band. Immediate resistances come in at 5100-5120.
8. The Bollinger Bands give resistances at 5195 and 5350.
To sum it up, watch out for supports at 4965, 4920 and 4870 and resistances above 5100.
I am enclosing the link of Lakshmi for those who are interested in bottom fishing of stocks.