The latest news on GAS PRICE hike has triggered a new wave of Stock rerating of RIL, ONGC and Cairn. The markets strength will come from these sectors. The current up move is a decent show by the BULLS to keep the BEARs at bay. The Rajan effect has given booster dose to FII investments. The FII invested close to 1.1 Lakh crore in 2013, they have recorded highest ever investment in 2010 as per reports. The real challenge lies in keeping their faith in Indian growth story & markets. As of now experts are favouring the BULLs and markets may touch new highs. Nifty shall not trade below 6130 level. The momentum needs to be sustained at least till the DEC13 expiry, for further consolidation. So long as Nifty stays above 6220 the markets are likely to make new high of 6435 then to 6550 level.
The banking sector is differently working and looking for South ward. Bank Nifty has to trade above 11550 level for it to perform in future. The ICICI has to trade above 1130, Axis above 1309, SBI above 1781 and HDFC bank above 689 levels.
The court order infavour of the lenders and against Vijay Mallya, the knee jerk reaction may impact United Spirits, so negative impact on the stock tomorrow likely to force the stock to seek lower level supports at 2530 level or 2380 is not ruled out. This can give good opportunity for Diagio to go for creeping acquisition. Similar, but not that much serious is on the INFY. The high profile Bala exit may have negative impact. The EXIT door is wide open to as many as 9 seniors, opted for greener pastures out-side.
The other scenario which is favouring BEARs when the NIFTY trades below 6130 level, is that the recent RUNUP is “ENOUGH is ENOUGH”. The US QE Tapering in the coming months may accelerate, more pain stored in for emerging markets like INDIA.The political equations definitely not favouring CONGRESS and the BJP case is no different. So lot of confusion may arise after two months and the BEST case to SELL is NOW. So build now to cover later. The CAVEAT in this scenario is that the GOVT. may do all that is need to prop the markets high, the RBI may slash CRR and Repo rates to boost the economy and a renewed investment EUPHORIA in the markets may trap the BEARS.
The MidCap rise is stronger than the fall shows that the markets are in BULL grip. Those who has the holding capacity of one year and two time averaging CAPITAL, then shall try to buy at the current levels, other wise go for “Stop-loss Based Momentum Trades”.
I have suggested to BUY Wipro, Auro Pharma and Escorts which made decent run in the recent times, exit 50% at current prices.
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