05th Feb 2012: Back to 5200 levels….

Suddenly every one is turned positive and bullish on Indian Economy. Indian Equity markets have attracted huge sum of foreign flows. Foreign Investors have been investing in India since the start of the New Year. Almost Rs.13bn is already there in the Indian markets. But there are sellers too. Domestic Mutual Funds are selling on every rise. They have sold stocks worth Rs.7.2bn.

Indian Equity market have given one of the best return in the whole Asia pack, with returns of more than 13% since start of this year. Rupee has also bounced back from its all time low to close above 49 v/s dollar.

After a long gap Bulls got in good grip on the market and some how managed to close Nifty above 5200 levels. 5200 levels seem to be the levels of 200DMA also. And in the past also it has been observed that it has been a crucial point for the support and the resistance levels. In mid of Oct Nifty tried to close above the same but that did not happen some how and Nifty made a low near 4500 levels.

Last weeks article said (Nifty if stabilizes above 5200 then we could see higher levels also. Close above 5225 may take the Nifty to 5325-5400 levels) and Nifty close at 5325 levels what was mentioned. Nifty made a low of 5076 and high of 5335 and close above 5325.85. Sensex closed at 17605.

Nifty and Sensex gained nearly 2% in a week. Midcap and Small Cap rallied 3% each. Midcap were the flavours for the week. Some stocks gained more than 25% in week. STC closed up 44%, ITI 27%, Prestige Estate 21%, Hexaware & Orient Paper gained 20%. Aban offshore 23%.Oil index gained 1.5%, IT index rallied 3.3%. Power Index closed higher with a gain of 1.6%, Realty Index 4.5%, Auto 3.6% and Metals 3%. Acc, hindalco, Grasim, Jspl, ACL gained 6%, Sintex, Ivrcl and Shopers Stop 16%. Jet 15%, Akzo & Educomp 13%, DLF 9%, Sesa Goa 8%, Tata power 8%. Hero Moto corp 8%, hcl Tech 7%.

On the losers side Ptc 12%, Tata Coffee 7%, Coal India 4%, Bhel 4%, Rcom 2.5%, Cairn & LT 2%. FDC 6.5%. 3M India 6%, Escorts % Srei India 5.5%, onmobile 5.5% and Prestige 5%.

Nifty have close above the 200 DMA. In the last week Nifty had closed above its 50 and 100 DMA. And the RSI have started in the over bought zone. In the past article I had attached a chart with the trendline marked. Nifty have closed above the long term trendline and have made a bullish break out. The rally could continue till 5400 and should phase out for a while.