The best part of the Bank Nifty performance came in
Sep-12 after it registered in Jan-12. In Jan-12 F& O series I asked viewers
to be long, this recommendation came in last week of Dec-11 that the markets
are bottomed out and likely to perform well. The Nifty was in 4700-4750 level
and every analyst is extending the journey to 4100 level and to 3900 level with
utmost pessimism in the economy and the EURO crisis. I asked the viewers to
take DAX as a comparative index and the markets will perform well so long as
DAX stays above 5900 level. This helped many viewers to cut their short
positions and many went for LONG. Along with the supportive action from RBI
cutting the rates and infusing liquidity in the system helped the markets to
shoot-up to 5700 level and came down to 5000 level. This has become an
intermediate correction rather than a sell off in the markets. The Bank Nifty
gained 1850 points in Jan-12 and Now again in Sep-12 it could add 1334 from the
previous month closing levels.
Now the real challenge opened to many analysts
whether the Nifty would touch 6300 and cross the all time high, and continue to
cross all levels to touch 6800 level or look for a consolidation for a longer
period. My take away from the readings is that Nifty would consider capping
below 5885 level rather than continuing the journey above 5935 level. The
stocks financial performance is not going to support the Nifty to stay above
600 levels in the first place and the local and global risk appetite is not
conducive with this kind of excessive infusions with bits and pieces of
financial support.
I personally believe that the markets may see a
SELLOFF in case DAX trades below 6950 level and Nifty trading below 5150 level.
This risk always exists as the BOOM is not built on the performance rather than
on the excess capital infusion into markets. This scenario is a danger
signal to the markets. As of now the markets are in bull grip and will continue
to be for some time…..
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