That’s called a very very fast movement. In the Seminar that was held on 3rd Sep 2010, I had mentioned that w will soon see 6000 in Nifty and had given a period till Dec, but it seems so that the markets men do not want to wait till that time.
Markets flared nearly 4.5% in a week. Nifty and Sensex gained on more than 4% each. The rally had been more off in the frontline stocks. Midcap and the Smallcap stocks felt left out in the rally. Mid cap Index was up marginally. Selected midcap and small cap rallied too. Delta corp surged 36% in a week on back of its land sale in Mumbai. Company will cut down its Debt via stake sale and land sale. On back of festive season, we saw positive movement in Archies which gained 27%. Company planning to scale up its number of stores. Ispat Ind surged surged 11% on back of stake sale news.
From the Large cap lots stocks Banking stocks rallied the most. Banking stocks had another week in a positive zone. Bank Index gained almost 6% in a week. Kotak & Axis Bank gained the most, nearly 10%. Hdfc Bank & Hdfc were up 8.5 & 7% respectively. Icici bank and Pnb were up nearly 6% each.
Oil & Gas index was up 5.5%. Ril after making a low of 925 surged past 1000 mark to close at 1027 up almost 5.7% in a week. Reality stocks gained some attention. The sector which lost the interest in the last few months has gained some attention from the markets men. Reality Index gained 4.5%. Dlf gained the most in the large cap stocks which was up 9% in a week. IT Index surged 3.2%.
FII’s has been a one sided buyer in the week. Since last Friday FII’s had bought stocks worth Rs.8500Cr. But on the other side the Domestic Institutions have been seller for nearly Rs.3500Cr. Markets men who try to short in the market, finds it really difficult to gain control of the market. Markets continued to rally. Nifty in the intra week crossed the 5900 levels and Sensex closed above 19500 odd levels.
Last week I had mentioned that the Nifty will find some resistance at 5663-5677 and close above the same will take the Nifty to 5750+ levels.
I had mentioned that the rally will continue and it is the extension of the 5th Wave. we will see Nifty trading at 6000 levels till this year end, but did not expected this to happen this fast also.
We need to stop here. Indian markets in the past few session had seen a sudden spark in almost all the sector. Indian markets have outperformed all the other global markets with a wide range. Indices closed almost at its 32 month high.
Nifty after making and intraweek high of 5901 closed at 5885 levels. In the daily chart the RSI is trading well above the overbought levels. In April 2009 also the RSI approached the at this levels. But the rally continued to for sometime and then the markets corrected. But after certain point of time, Nifty corrected and fell down by almost 10%. RSI at that time was near 79.45 and currently the RSI is above 80.
Let’s go back to the year of 2007, month Oct when the RSI was nearly at 87. And the rally continued for few more sessions and then the Nifty corrected by nearly 15%. Let’s go a back to month of July 2007 when the RSI was up at 80.37 and markets again corrected for nearly 15%. Currently the Indian markets are trading at almost same levels. This rally may continue for another 1-2 trading sessions and after that we could definitely see some serious corrected.
But if we check the RSI weekly chart there is still more Steam left. At present the RSI is still at 71 and that is way below its top of 78. Nifty will face stiff resistance at 5923-5975 on weekly charts and in Daily chart Nifty will face resistance at 5875-5900 levels.
Keep booking profits at higher levels. No major buy positions to be kept at these levels. FII's bought nearly Rs.8500 Cr of stocks in last 5 trading sessions, whereas DII's sold almost Rs.3500 Cr of stocks. There is practically new bad news in the Indian markets but the sudden spike in the Indian markets is a lil fast. So we might see some correction.
Nifty trading at a PE of 24.74 and Bse at 23.18 and at the all time high Sensex PE was above 26.
For a Indian markets to have another round of bull market, we need to have some correction or u may say profit booking at these levels. There is no bad news in the Indian markets, just a lil bit of profit booking required. But midcap and Smallcap should outperform the Frontline stocks.
Sales at US retailers posted their largest gain in five months in August on strong receipts at gasoline stations and clothing outlets, further assuaging fears of a double dip recession.
Last weeks call:
Buy AB Nuvo above 880 with SL of 863. Made a high of 897 but SL triggered later on.
Buy Bob only above 848. Made a high of 906.
Buy Bel above 1745. Made a high of 1848.
Sell Cairn with SL of 330. SL triggered.
Sell Cipla with SL of 310. Made a low of 304 but SL triggered later on.
Buy Hdfc with SL of 2239. Made a high of 2426.
This week Call:
Buy Rcom above 170 SL. 161.
Sell Bajaj Auto below 1440.
Buy Bpcl above 770. SL 765.
Buy Bharti Airtel above 561.
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