Sensex View (16677):
- Sensex closes @ 16month high
- Sensex has doubled from March2009 low of 8047 in just 6month.
Sensex from low of 7697 on 27/Oct/2008 has made a 16month high of 16700 on 16/Sep/2009 which is more than double in 11months, time wise Sensex has taken 216trading days to reach here and 223 is an important Fibonacci number which comes next week around Derivative settlement.
Also from March lows it has completed 130 days where 134 is a Fibonacci number again. Derivative is heavily loaded with PCR=1.63 and Overall market Open interest Rs.1,14,426crs and with just 5trading days as Monday 21/Sep/2009 is a holiday due to EID which gives a long weekend, this settlement can see big rollercoaster ride.
Sample of 1290 stocks taken from NSE 279 stocks are near high of 16months in a range of 10%, and Advance to Decline ratio for this month of Sep2009 in BSE Adv 1794 Dec 1214 Unchanged 18 and NSE Adv 823 Dec 485 Unchanged 9 and Nifty has gained 6.36% in the month of September 2009 and this rally has seen overall performance compared with Rally in 2007.
Advance Tax figure has come and NIFTY50 has a trailing P/E of 22.33 and BSE500 has trailing P/E is 21.84 and even if our growth is 20% Indian market seem to have fully priced and with Market gaining and upside relatively 8-10% from here.
Sensex has made 12Gap-up in last 6months to reach this high and 3Gaps have been formed in this month of September2009 alone and this in technical terms has become overbought. FIIs have been aggressive buyers in market and already short squeeze is very high and once short are removed out of the system market become bottomless where big correction possibly 30-40% becoming possible.
Technically Sensex failing to cross 16700 on closing basis in next few days and move below 15900 is only considered weak till then weakness is not seen technically. But when markets corrects it would become hard to find a buyer, as market correction are faster than rise.
Market has given excellent return and Investor who had followed me should be happy as for the past 7years we have almost been right but, always being right will be very difficult and by increasing cash position we can always find good stock ideas even if the market where to rise. When we can find buyers for our stocks @ fancy price time we take some profit, and have cash. Correction never happens when we want it, it always happens all of a sudden and many reasons will be attributed to it.
Like before I am unable to say (Predict) if correction is going to start, Time period wise market may be nearing its top so Caution is advised.
