It was a week of consolidation for the markets and they had a minor correction to close the week about 0.3 pc down. The coming week is a truncated week with Monday being a holiday for Holi.
There are several key points to focus on:
1. The FIIs continue to buy. As a result, the rupee is strengthening and hence the export oriented IT and Pharma stocks are correcting. also, people are booking profits in these sectors and moving the money to beaten down stocks.
2. The economic data is coming in good as far as inflation is expected ad hence the Banking stocks will continue to rise as the probability of a rate hike in April recedes.
3. The Opinion Polls continue to point to a BJP victory. so, till the election results are out there will not be any major correction, some minor dips which will be bought.
4. Preparing for the worst case scenario, one can get rid of dud stocks in the portfolio right now and focus on high quality stocks. If there is a Hung Parliament, expect the markets to remain down for 1-2 years.
5. Technically, right now a correction can be expected to 6350-6400, the rectangle from which the breakout happened.
There can be 2 scenarios right now, we immediately correct to 6350-6375 or first rally to new highs and the correct.
The fresh up move from 5933 is nearing maturity now. Post this, we will have the correction to this entire up move.
Then if the wave counts are correct, post the Results there could be another blockbuster rally. What the pre-election rally has done is that it has give people a chance to exit their positions at least once and book profits.
There are several key points to focus on:
1. The FIIs continue to buy. As a result, the rupee is strengthening and hence the export oriented IT and Pharma stocks are correcting. also, people are booking profits in these sectors and moving the money to beaten down stocks.
2. The economic data is coming in good as far as inflation is expected ad hence the Banking stocks will continue to rise as the probability of a rate hike in April recedes.
3. The Opinion Polls continue to point to a BJP victory. so, till the election results are out there will not be any major correction, some minor dips which will be bought.
4. Preparing for the worst case scenario, one can get rid of dud stocks in the portfolio right now and focus on high quality stocks. If there is a Hung Parliament, expect the markets to remain down for 1-2 years.
5. Technically, right now a correction can be expected to 6350-6400, the rectangle from which the breakout happened.
There can be 2 scenarios right now, we immediately correct to 6350-6375 or first rally to new highs and the correct.
The fresh up move from 5933 is nearing maturity now. Post this, we will have the correction to this entire up move.
Then if the wave counts are correct, post the Results there could be another blockbuster rally. What the pre-election rally has done is that it has give people a chance to exit their positions at least once and book profits.
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