Saturday, February 11, 2012

Markets: What next?

This week the market was subdued as compared to the earlier weeks to clock a bet gain of about 56 points on the Nifty. Now, where do the markets go from here?

1. The FIIs continued to pile in the cash. As long as the FII money comes in, the rally will continue. The second tranche of LTRO money is due on Feb 28th and that will be an additional booster to the markets.

2. As per the count last week, the whole fall could have been termed as A. The present up move would have targets of 5650 and 5912. All the retracements have been strong in the previous fall increasing the likelihood of stronger rally. B could rally upto 5650-5900 with a final C leg terminating at about 4000.

3. When and if the markets reach the 5650 and above then will the question arise. Is this a new bull market or just a bear market rally.

4. As I see it, the mid caps will perform well over the next 2 months. accumulate all good mid caps on dips and book about around 5700-5900 and wait and watch.

5. If the Congress does well in Uttar Pradesh, that will be an additional boost to the rally. I expect a good budget this time around.

6. Buy the financials on dips. I have retracement levels of 5085-5217 on the down side.

7. The Greece crisis will be averted. Its just showmanship at the moment and that has been factored in the markets.

8. The momentum has been plateauing a bit. In this rally every week the markets have rallied 122, 120, 182, 156, 121 and 56 points in the last week. So, the momentum is flagging a bit and some correction will be healthy.

For those interested in Stock Picks, I have picked out the picks in Cherry Picks and Mid caps along with Lakshmi Ramchandran. Many of our picks have give 30-40 % returns and the average portfolio return has been 25 % since the lows.

No comments:

Post a Comment