That's ittt......

Before reading this, read the article posted on 03rd Sep named "Nifty above 5600 levels".
I had mentioned in that the rally will continue and it is 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.

Markets opened by almost flat but pre lunch session Sensex surged nearly 150 points. Buying by the FII's kept the markets in the positive trend and the Sensex closed up 150 points. Nifty after making and intraday high of 5869 closed at 5860 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.

Lets 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%. Lets 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 definately 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 chart 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 7500 Cr of stocks in last 4 trading sessions, whereas DII's sold almost 3000 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.