Sunday, April 13, 2014

Range Bound Market in the first 2 weeks of April

The markets have gained 1.1 pc for the first 2 weeks of April. The broader market is catching up and the front line stocks are taking a short breather.

1. After a blockbuster rally in March, April was supposed to be a range bound market and so far it has played true to form. In March, the FIIs bought almost 26000 crores worth of stocks and in April the figure has been only 3500 crores with the FIIs having sold stocks on Friday worth 362 crores.

2. The markets have crossed the multi year top of 6350 and sustained above it now for 6 weeks. This now becomes a major support and the market should test this support once before May 16th.

3. The targets for the correction remain 6610, 6480 and 6376.

4. Infosys results are on April 15th and will be keenly watched. Markets tend to correct around the Results season and lets watch out for that.

5. Next week, the markets trades for only 3 trading days. the likely range at the beginning of the month was stated to be 6400-6900. we have tested 6819 and now maybe the time to test 6500-6550.

6. The Gilt fund yields have cooled down a bit to 8.95 % and the Gilt funds may give a good return if the interest rate cycle dips.

We are in a bull phase now and every dip is a buying opportunity to be either hedged at the time of election results with puts or part profit booking.

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