The ample money with MFs!, but the strength?

The MFs have received highest ever fund in flow for investments in equities and the total money under Assets Under Management (AUM) increased from Rs 3, 50,279 to Rs 4, 07,754. The investors confidence has increased in MFs as they have better bargaining power in case of a severe volatility blow. The short-term/ immediate indicators are bullish on all fronts. The real strength of Indian market can be tested, whether the cracks in global indices can crumble our markets or not?- is the foremost challenge to our valuations.

Technically speaking the Nifty is strong even it falls to a level of 4141-4143. But the worrying factor at this point in time is the capacity to bounce back across the board. The mid cap story is very much specified to 75-100 stocks and the churning is also wild. A close study can reveal a fact that when there was some activity in a particular stock with 6 to10% + up move, has become so short lived that it could not advance at least on the next day, is a clear sign of distribution at higher levels.
So, go long for a day or two but don’t try to average in case of a loss. The back drop of ADR’s was green and the Asia is biased on bulls side except China. It is likely that the Nifty could advance further with the support of Infosys and techs but the melt down in China by 4% is not a small issue. The RIL is trading at the verge of it’s support for day traders. Nifty shall not trade below 4293 level then it will touch 4229-4232 level.

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