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The US market rallied yesterday coming out of
the President’s Day holiday the day before. The
Dow moved up by 170 points, the Nasdaq went up
31 points and the S&P 500 closed at 1095 up by
19 points.
Asia is understandably very buoyant this
morning. Japan is up 2.21%, Australia by 1.93%,
South Korea by 1.5% and Taiwan, Singapore and
China are up by 1.1% as we write this Market
Outlook. It promises to be a strong opening this
morning. Our man, the SGX February Nifty, is
already at 4905 albeit on low volumes. Doesn’t
matter! Today, a dash 4900 seems to be something
like a chronicle of the future foretold.
Bears and skeptics are likely to move into
hibernation, however temporary that may be; the
call option writers would be scurrying for
cover. Even if temporarily, the tables seem to
be turned for the day. It may not be just for
the day, it could well be for the short-term.
Did someone say the onset of the Pre-Budget
rally? Yes, there are initial indications that
the short-term trend may be turning upwards and
the range breakout above 4930 – 4950 would
confirm that. However, until it happens, the
indomitable skeptics would continue to wave the
red-flag at every step of the forward march of
the Nifty. And unless 4950 is conquered
decisively, you can’t really find fault with
them.
Immediately, the range between 4888 and 4915 for
the Nifty should be watched very closely for it
is a potentially strong supply zone and the
range between 4930 and 4950 would be the
ultimate test zone for the bulls. Our
expectation is that the stage is set for the
much anticipated pre-budget rally. However,
paint with any color you like the fact remains
that any rally or fall coincides with a rise or
fall in global markets. Later on we may choose
to add a nomenclature that we may like.
On the downside, if the Nifty again falls below
4810 – 4790 range it would mean this hope of a
fresh rally would be belied and the weakness
comes back again. However, that is most likely a
low-probability event for the day.
Rajat K. Bose |
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All prices relate to the NSE, unless otherwise mentioned. |
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Stop-loss levels are given so that there is a level below/above, which the market will tell us that the call has gone wrong. Stop-loss is an essential risk control mechanism; it should always be there. |
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Book, at least, part profits when the prices reach their targets; if you continue to hold on to positions then use trailing stops to lock in your profits. |
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Don't chase a stock, if you are unable to buy a stock because it hits circuit levels on successive days, don't buy that. |
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The analyst and his clients may or may not have positions in the securities mentioned above. |
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Trading involves considerable risk. Trade at your own risk to the extent you are comfortable. The analyst shall not be responsible for any losses incurred for acting on these
recommendations. |
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