The markets were up for the week by almost 2 pc. The gains mostly on Friday thanks to the ECB allowing unlimited bond buying. Let us explore if the markets can go up higher.
Technicals:
1. The 3rd wave up of the C leg seems to have commenced. Typically, the 3rd wave is the most powerful and begins with a gap up. We had a huge gap up on Friday.
C1 4770 - 5348 = 578 points
C2 5348 - 5032 = 316 points
C3-1 5032 - 5448= 416 points
C3-2 5448 - 5215 = 233 points
C3-3 should exceed 416 points which gives us a minimum target of 5631 which is the previous top also.
If the above wave count is correct then 5215 will remain the bottom for at least 3 months to come, that is till Diwali.
Fundamentals:
1. The large caps have moved first. Next week, I expect the mid-caps to rally.
2. The monsoon worries are behind us. There is o chance of a drought now and the deficient monsoons are down to 10 pc.
3. Shriram City Union is coming up with NCDs and one can invest small amounts in this. The rate of Interest offered is very attractive.
The market is now a buy on dips market. Every dip can be utilized to go long with a stop loss of 5215. Above 5400, the next logical target for the market is 5631.
Gold:
Gold will be in a fresh bull run after it crosses 1810 USD. Till those levels, I would be cautious on buying gold. Gold is currently trading at 1735 USD.
If one buys gold at the current moment and if this is only a corrective up move, then 1 can get stuck. The Gold prices in India have risen thanks mainly to a very weak rupee. Globally, the previous high for gold was 1910 USD.
Technicals:
1. The 3rd wave up of the C leg seems to have commenced. Typically, the 3rd wave is the most powerful and begins with a gap up. We had a huge gap up on Friday.
C1 4770 - 5348 = 578 points
C2 5348 - 5032 = 316 points
C3-1 5032 - 5448= 416 points
C3-2 5448 - 5215 = 233 points
C3-3 should exceed 416 points which gives us a minimum target of 5631 which is the previous top also.
If the above wave count is correct then 5215 will remain the bottom for at least 3 months to come, that is till Diwali.
Fundamentals:
1. The large caps have moved first. Next week, I expect the mid-caps to rally.
2. The monsoon worries are behind us. There is o chance of a drought now and the deficient monsoons are down to 10 pc.
3. Shriram City Union is coming up with NCDs and one can invest small amounts in this. The rate of Interest offered is very attractive.
The market is now a buy on dips market. Every dip can be utilized to go long with a stop loss of 5215. Above 5400, the next logical target for the market is 5631.
Gold:
Gold will be in a fresh bull run after it crosses 1810 USD. Till those levels, I would be cautious on buying gold. Gold is currently trading at 1735 USD.
If one buys gold at the current moment and if this is only a corrective up move, then 1 can get stuck. The Gold prices in India have risen thanks mainly to a very weak rupee. Globally, the previous high for gold was 1910 USD.
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