It was the fifth straight week of losses where the markets ended down 0.7 pc. The markets continue drifting down. This in spite of the FIIs pumping in money.
1. Post the rollback in rail fares and the coal scam coming out, markets have drifted lower.
2. The markets are stuck in a trading band of 5233-5450. A break on either side will give a move of about 200 points.
3. As per Elliot analysis, we are in the corrective B wave to the entire up move from 4532- 5629. Last week I stated,
As per Elliot, we had wave A ending at 5630. B wave is the corrective wave for this up move. B-a finished at 5171. B-b was from 5171 to 5499. Now, we come at interesting cross roads. 1 view is B-b ended at 5499, leading B-c to end the correction anywhere between from 5215 to 5040.
Another view is B-b sub wave a ended at 5499, B-b, sub-wave b is ongoing to end anywhere from 5305- 5236 followed by another up move till 5500-5537 to complete B-b. This will be followed by another down leg till 4950-5040 in the form of B-c.
This view still stands.
4. It has become a listless traders market. The Fuel prices are expected to be hiked next weekend. The quantum of the hike and the roll back will demonstrate the seriousness, the government has on economic reforms.
5. April will see the first set of corporate results coming in. I was analyzing the results of our mid cap picks today, the rally seems to be in anticipation of better corporate results. This quarter at least, the results should demonstrate a uptick, otherwise this rally is riding on liquidity and nothing else. This is because markets typically are 6 months ahead of the cycle.
6. The silver lining is that the global cues are positive. Till the next debt crisis erupts, and the liquidity keeps flowing in, the markets will keep going higher, if there are no negative domestic surprises. Next week is the last week before the Parliament goes into recess.
It is a traders market and I trade in and out of mine and Lakshmi's picks.
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