NIFTY MAY CROSS 6280, SOON..!!!

The markets fell from 6080 level to 5880 level but the positive aspect is it came from a low of 5570 levels. The Index performed despite of massive correction in the banking stocks. The rally in HUL, ITC, RIL and IT stocks helped Nifty to scale the technical hurdles. Now the challenge lies in holding on to the gains and keep the upward momentum going.

As Udayan commented in Money control/CNBC-TV18, the Indices are now become deceptive because the portfolios are bleeding. The Midcap massacre is evident. The fact is, the winners always chose the WINNING stocks. 

In my earlier write-ups and also in my twitter postings mention that the markets especially the banking stocks will see the low cuts. the scrip churning is the very nature of market operation and also market participants want to chase the new breed for more gains. The huge positions were built in HUL, ITC and other FMCG stocks in anticipation of GST, meanwhile the results fuelled the rally for last 4-5 quarters despite of repeated postponement of implementation. 

The RBI would have given rate cut but the Rupee fall threatened the decision makers and now they are in view of tightening the money supply to avoid further damage. Once the dust settles, the RBI may focus on growth and allow the easy supply/liquidity in the system. The banks NPAs are rising and the banking sector valuations are re-rated.

The doubts of continuation of this Govt in power was faded at least upto October. So the early election to Lok Sabha has become a drama. I call it "PLAY by Some". 

The repeated assurances from the FM and the Govt. did not help, FIIs pulled out close to 18000 crs from the markets. The issue is How we can build the confidence?. Our markets are shallow and any further pull-out would create much greater damage.

Now Nifty has support at 5842,5806 levels and it shall not trade below 5760 level. Then the markets are likely to touch 6350 level in the near term. The markets will consolidate arround 5750-6050 before it before it takes a leap jumps to 6350.

The RIL may again test 840-50 level. The counters like HUL,TCS, INFY may slide, the banking counter may inch up before they fall again. The test for the last leg of fall may come from ICICI. The RBI may ease, rate cuts in SEP is expected. I think the markets will gain momentum with the support from RIL, INFY and TCS and other heavy weights. 

Now the Nifty top 10 momentum is more based on ITC, RIL, INFY, HDFC, HDFC Bank, TCS, ICICI, HUL, LT ONGC

ITC		10.66
RELIANCE		7.71
INFY		7.41
HDFC		6.61
HDFCBANK		6.26
ICICIBANK		5.67
TCS		4.77
LT		3.63
HINDUNILVR		3.6
ONGC		2.83