Hey PPL,
the market blew up in the last 1 hours on short covering and ended on the critical resistance point ie 5260.... The market has been struggling to break this level since long ....
banking and IT stocks esp Infosys was on fire yesterday ..... My guess is that the IT sector and Banking should outperform today to break the 5300 levels( as the Realty sector is in a total chaos). But i see one problem with the IT sector; TCS is at an all time high of 840 which is acting as a high level resistance. Even Infosys has been rallying for quiet some time now... So this might see some correction in this sector..... I have very bullish about the overall market... but 5300 won't be a cake walk unless it opens a big gaps up and closes above those levels (which is quiet possible looking at the US markets now )
Would be great if someone can comment on my analysis....
Thanks
There is no reason as such to be bearish on the market. But there are a handful of reasons to be cautious. The OI figures have touched new highs last friday and the VIX has fallen to new historical low. Now, the reason I am laying so much emphasis on these two indicators is because they have been very accurate to pick market top's in the U.S. market. Somehow, traders feel this time it is different, but at this moment I am very cautious.
We are approaching critical levels of 5300 and if this gets taken out we might head higher. But overall there is no denying that market's are trading with significant amount of divergences between Main and sectorial indices. I don't know how many follow Elliot Wave analysis, but even going by that principle we are due for a wave 2 correction.
So let's see what happens. I have moved up my stop losses near the current market levels. So even if market's do rally, I won't be missing out. And if the market's indeed start correcting, I would be getting out with descent profits.
Tc.
