Advance tax numbers hold the key after Break-Out
Nifty (5640) has closed positive +161points after Break-out and Nifty closed @ 32month high after breaking 5520 the market has given a direction and till 5500 below close is not seen weakness is not seen. Cash stocks are giving good profits and many stocks give 20-30% returns in 5-6days and this kind of movementum one rarely gets in market so avoid leveraged position and play safe with 5400 on closing basis as stop loss and do not average any position as once markets starts to correct things would be difficult. (Trading market so any close below 5400 for 1-2days on the downside or 5650 above close for 1-2days only it would be advisable to take a directional call). For the weekly basis 5580 is a strong support and 5670 is a strong resistance and broad range 5440-5720 for nifty if certain support/resistance is broken. Nifty long term moving average supporting market 200DMA which 5193 and 100DMA is 5287 any close below 5400 weakness will be high
Support-5590-5535-5470
Resistance-5685-5730-5765
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IIP Data has surprised with 13.8% growth while 7.7% to 8% was widely expected and Capital Good saw 63% rise inflation (on Sept. 14) and RBI review (on Sept. 16) and advance tax numbers by corporate would start to flow. Many data indicate there is a slowdown. Agri commodity stocks are seeing a good rally after shortage globally of Wheat and rise and fertilizer stock look good for more gains from here. Market is overvalued and if flow of advance tax numbers has to support as Globally funds dry as per EPFR data. Mumbai High Court verdict on Hutch Vodaphone deal will have far-reaching implications as far as FDI, M&A and PE activity in India are concerned SESAGOA & CAIRN can become weak.
Sensex View
Sensex has closed above 18700 and we had expressed a view of High for Sensex as 18700 and Low as 13000-12000 in the year 2010 and with advance tax numbers and RBI credit policy we would revisit our target after the week is complete as of now Global & Indian fundamentals don’t warrant a change in view and Euphoria in market are fast to move up and leads to major crash and time wise it takes less time to correct. Be stock specific, book regular profit and avoid leveraged position as left out feeling is seen as focus for rally.
