Sunday, February 8, 2015

Correction after a rally

The markets corrected another 1.7 pc this week. After a breathless rally, the markets look to correct. Let us see the road ahead for the month of Feb.

1. The Coal India FPO and the HDFC offers sucked out about 32000 crores worth of liquidity. This was also one of the reasons why the markets were subdued.

2. The FIIs sold 1100 crores worth of stocks and the DII sell figures were flat. Basically, the market did not have any buying support from any of the institutes.

3. The exit polls point to an AAP victory in Delhi. The Nifty may come down another 200-300 points over this before the pre-budget rally starts.

4. The Union Budget at the end of the month is a key trigger for the markets.

5. The next support levels lie at 8627, 8525 and 8416 levels.

6. The Budget rally can take us to 9200-9300 levels.

7. The Delhi elections by themselves are meaningless in the National Context as there are only 2 Rajya Sabha Seats from Delhi. The spill over effect can be in Punjab where elections are still 2 years away.

Now, is the time to add solid stocks to the portfolio and await the Union Budget.

Markets correcting were not a surprise as a whole lot of new paper was absorbed by the markets. Monday Tuesday may see some more correction over  the Delhi polls. After, Wednesday one can think of fresh positions for the budget.

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