Indian markets are likely to start on a firm footing to begin the week after being in red on Friday. Positive global cues and some pre-budget shopping might lift spirits of the sub-dued markets, this morning. Expect the benchmark index or the sensex to gain nearly 0.5 percent to begin the day
Investors on Dalal Street are likely to turn to earnings from Infosys Technologies,Bajaj Auto and Renuka Sugars, bluechips slated to usher in the third-quarter results season, for the corporate view on economic recovery.
Realty stocks were a bright spot in a falling market, among the NSE-50 as investors found some value in DLF and Unitech which gained between 3 to 4 percent for the day. We see some strength in this sector in the next few sessions. We advice investors to trim their holdings on every rise in this sector.
Midcaps have been flying high for the past month and there seems to be no ending in the near term. Balaji Tele films, Excel Infoways,Sintex Ind and Finolex Ind are some of the stock to watch out in the coming week.Overall, a positive day for the markets with Midcaps taking the center stage
Nifty
The short term moving average is an indicator of the trend in the near future. The value for the short term moving average (20 DMA) is at 5135 and medium term moving average (50 DMA) is at 5032. Presently, the Nifty trading above 50 DSMA and 20 DSMA which conveys bullish signal in near term. As long as Nifty continues to trade above these moving averages, bulls will holds the grip.
Remember we have said breakout above the Neckline of the suspected H&S formation has been proving elusive for the time being. This has been mainly on account lack of conviction shown by reduction in volumes. Also after clocking the highest-ever volume on the second day after election results, i.e. on 19th May'09, we have seen falling volumes on both positive as well as negative days. Moreover history suggests that market usually corrects after doubling. Now with illusive break out above 5200 levels, new trading range between 4900-5370 seems more prominent and worthy.
In addition to that At its highest level of 5200 on Nifty and above 17400on Sensex, PE Ratio had reached 22+, which is the maximum figure of 22 seen under 'normal' circumstances. Only foams can push it higher towards 27-28. Such fizz happened during '2000 and '2008, which were 8-year cycle tops. Usually such higher valuations occurs in 8 years. Its never been in the history of Sensex to create such bubbles for two consecutive years. Hence we expect some sort of pause in Rupee valuation in upcoming months. Moreover low interest rates in US and constant appreciation of Rupee will support our argument in near term. There fore we might see some consolidation on higher levels though momentum might be remain on buying side. On the positive note, if we totally relies on the current rally and consider this phase into new bullish one, we might see key benchmark indices to touch its previous highs of 2008 very soon. With such scenario key benchmark indices may shifts into long term consolidation of 10 years (similar to consolidation as seen in 1992-2003). This picture is self-illustrative. Investors may take their positions accordingly during the coming 2-4 years, and book profits or consider prevarication, as and when examined essential