Sunday, July 5, 2015

Markets at Crossroads both Technically and Fundamentally

The markets closed up by 1.2 pc as the investors awaited the results of the Greek referendum. The markets are at a cross roads now, both technicaly and fundamentally.

1. The Greece referendum is on Sunday and the results will be out before markets open on Monday. If Greece elects to stay within the EU, the markets may rise.

2. The monsoons also have reached a critical juncture. We are in surplus of 16 pc with about 25 pc of monsoons gone by. The next 2 weeks become very critical for the monsoons.

3. The Parliaments opens on July 21st and with the Lalit Modi saga, there are high chances of Parliament getting disrupted.

4. The corporate results will start coming in towards the end of next week and usually during the results season the markets are subdued.

5. Technically 8500-8550 is a very strong resistance zone and a breakout above this level will open the gates for new highs.

6. The FIIs have been net sellers in the months of May and June. Still we have gained about 300 points on the Nifty since the month of April. (April 30th) This selling has been absorbed by the markets.

Now, there are 3 scenarios which can play out:

1. The markets rise on Monday on the back of Greece referendum and then start losing ground. (Most likely). We will go back to the 8000-8500 range for a couple of more months.

2. The markets breakout and we rise to new highs. (Medium possibility)

3. We start falling towards 7500 (least likely but possible)

It would not be a bad idea  to book some profits if the markets open gap up on Monday.

No comments:

Post a Comment