Nifty is struggling to move past 5310 after it marked this high on 06/Jan/2010 in the last 9trading days there is some tiredness shown by the Index. On 27/02/2008 Nifty made a high of 5368 and after 459trading days 5368 seems to be very big resistance to cross. Now Nifty has made a rising wedge in a rising market which is normally bearish but we have odds when in rising market rising wedge has given good returns also and one such occasion has been general election result when market upper freeze.
Now with Budget ahead things look unpredictable and many stocks have priced in and results flow has been very good till now. Interesting fact in market, Nifty Trailing P/E ratio is 23 and BSE500 is quoting around P/E 22 trailing leaving the boarder markets fully valued making risk to reward unfavorable when in October 2008 and March 2009 when aggression in buying stocks were suggested.
Year 2010 will be year of PSU & this year can possibly be a year of negative which has been regularly expressed and market are reaching euphoric levels but still it is too early to predict any major correction. Government needs lot of money to bridge fiscal deficit and now in my view Government is the biggest speculator of market so timing market is never good at this point of time as many statements from Government would be made to boost the sentiment. Investor be with good growth stock increase cash position avoid leveraged position as results season major flow starts and then budget run-up also would do many speculative move.
There can be many negative in market in short term 1-2years but by 2016 I still maintain my Sensex Target of 45000-50000 and expressed in SUNNEWS channels & Naanayam Vikatan (Tamil Magazine) and I have also expressed that Sensex would cross all time new high by December 2011 or January 2012 and in 2010 chance of Indian market correcting till 13,000 levels is a possibility. But do understand these are based on few calculation and chances of going wrong is very high as in Technical’s we deal with probability and never certainty.
Advise: Please be invested only in stocks where next 3-4years visible growth can be seen avoid Tips are calls, even if you get please verify yourself before buying, at this point of time any small correction will lead to huge loss as many investor are leveraged in many cash stock and even if Index is flat losses can be huge
