Sunday, May 15, 2016

Election Results to watch out for

The Markets are in a somnolent state oscillating in a thin band of 200 points on the Nifty. The monsoons in a couple of weeks or so will be 1 solid trigger. This week we have the election results of 4 Assembly States.

1. Usually, State Elections should not affect the markets but in 2006, the markets had a steep crash after these results. The BJP is a marginal player in most States, except Assam. This result is very crucial for the Congress Party. If they are able to show a strong showing and retain Assam and Kerala, then the markets may take a plunge.

2. The FIIs have been marginal buyers. They are not pumping in huge quantities either. This is 1 more reason why the market is not giving a breakout.

3. Technically, as is for the last several weeks, 7950 and 7750 remain key levels. We ended 13th April with 7850 and now we are at 7815. The markets have not gone anywhere in the last 4 weeks.

4. The Met Department is supposed to issue a second monsoon forecast today. I expect it to be positive.

5. The Parliament has closed and there will be no action till the Monsoon Session in June. No GST bill passed so far.

6. The markets are listless and waiting for a trigger to either rise or fall. I expect this scenario to continue, firstly at least till Thursday when the elections results are out and secondly the more major trigger, the progress of the Monsoons.

There are individual stocks which give buying opportunities and my advice is to pick them when you feel the price is right. Such stocks may not fall further when the markets fall.

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