Friday, May 16, 2014

Modi wins: Profit Booking sets in

Finally, after all drama the votes have been counted and the BJP has come to power on its own.Today also the FIIs were big buyers and DIIs marginal sellers. Profit booking kicked in around 2 pm and lets look at the road ahead.

1. The Technicals I will visit on Sunday. Looking at the fundamentals, its the best possible result. BJP has a majority on its own and with allies close to 340.

2. The next trigger for the markets is the cabinet formation which will take about 4-5 days. The choice of Ministers, especially the Finance minister will set the stage for the next up move.

3. Post the Cabinet formation, the next trigger is the Monsoon followed by the Union Budget.

4. There will be a series of Assembly elections in key states like Maharashtra, Delhi, Bihar around Diwali. That will be a trigger down the year.

5. Over the weekend, many FIIs will re-evaluate their India allocation and that could be a trigger in the next week, especially on Monday.

6. The markets have got what they wanted, a clear decisive mandate for 1 party. Now, the next moves will depend on the party and their policies. As per 8 year cycle, we may have a dream run peaking in 2016. All dips, can be bought into.

I wonder if it was the retail who sold today? FIIs bought big. DIIs sold 10 pc of the volume FIIs sold.

At the present moment, it is prudent to book part profits in stocks bought between 5933-6600. One can always re-enter at lower levels.

No comments:

Post a Comment