Lower level buying...

The markets are rejoiced with the bottom support at 4700 level despite of the sharp fall in the European markets in the early this weak. The regular readers might have noticed that the world markets are in bull grip except the Japan market-Nikkei. The best out performed and the recent barometer is the DAX. The Germany has given best returns to investors and it had even strong support at 5000 level. The DAX bounced from that level with vengeance and the bulls are confident of their returns over longer period of holding.

The US market though struggling to revive on the prospects of economy getting stimulated by the federal infusions. The banks few years back are worst scrips now quoting decent prices based on their asset quality. Now these banks even do better with the reviving of the real-estate and consumer demand. The down grade of Moody’s ratings is a caution but not necessarily an indication of crippling/sinking economy. The best barometer is the stock market. The S&P is still quoting close to 1180 still above the 1050 support level.

The Nifty is trading in the lower range of the 4700-5700 band, struggling to stay above 4930, has become a herculean task. The Nifty may touch 5280 level to trap both the short sellers at 4700 level and buyers above 5180 level is a likely scenario for NEXT 6 months. The Dollar appreciation (in my opinion a sponsored programme) helped the exporters to especially the soft ware service sector and to invite more FDI in to India, supported for the rise in the software stocks and likely to rise further. The Infy did not touch the 1900 level as anticipated when it started falling from 2700 level. Now in the changed economic environment, current move likely to touch 2700 level in future.

The Banking sector which was attracted all bad news in recent time likely to under performs and will see lower levels. The downgrade of SBI will add fuel to the fire. The temporary relief in the ICICI and Axis shall be used to short at higher level. The earning season starts from Infy to focus on scrip based performance in the bourses. The focused approach will provide opportunity to gain from the results based moves. The Govt is likely to announce following the lead provided by the UK stimulus move. The FMGC sector, the outperforming sector likely to join the draggers list due to the inflation based tightening of the liquidity. The future growth in the indices can be tracked once Nifty touches and bounces from 4400-4500 level. The commodity stocks will gain the buying support as the cycle likely to see a silver-lining.