Sunday, March 10, 2013

Will the Rally sustain?

The markets rallied by 4 pc in the past week. The rally caught many by surprise and let us what lies ahead for the rest of the month. Whatever be the short term direction of the market, India remains a strong growth story in the long term.

1. 15th March is the time to pay advance tax final installment. market typically remains subdued expect in a few years.

2. The inflation numbers are out next week and the RBI policy on the 19th of March. Any rate cuts and the markets will rally.

3. The Government has made a lot of announcements, a pragmatic budget has followed and the Results have of Corporates have been declared.

4. There are no positive triggers left except liquidity gushing out. What I have noticed is this up move from 5663 - 5953, many of the stocks have not moved.

5. 5950 - 6000 becomes a critical resistance zone due to many moving averages, previous resistaces, supports lying in this zone.

6. Elliot throws up 2 possibilities. The wave 4 has ended at 5663 and this is last leg of the rally heading towards 6400-7000 range or 1 more down leg is pending to re-test 5400-5550.

In either of the 2 cases, the market is in no trade zone. It has rallied over 300 points so at least a correction of 100 points is due. 5850-5880 are support areas where 1 could add to their positions.

Nothing beats investing in good quality stocks at every dip.

For those interested in Options, I will update my Options link comments section.

No comments:

Post a Comment