The week past and expected
In the last week, the market has neither broken lows of the previous week nor the highs. But even though it went down
too steeply the market has managed to comeback to the previous highest level of 5150/17150 with an absolute recovery
in index stocks. On weekly basis, we may say that the market has managed rising channel and series of higher bottom, if
it sustains above the level of 5200/17400. Above 5200/17400, we may expect recovery up to 5400 again in coming few
weeks there after.
However, the dismissal of 4950/16550 may drag down the sentiment to 4785/4730 again, which is unlikely but one must
be prepared to see worst also where the global environment is still volatile.
If we go through world cues, then we may say that the Euro index is recovering as per expectations and may recover further
more as per chart. The best part is that the S&P 500 has managed the level of 1040 in the last week twice and in case
if it breaks 1110, then it may enter into medium-term bullish territory, which is again supporting factor for bulls. On
weekly basis, Dow and S&P has not yet given negative divergence that will keep the hope alive of reaching previous highest
level in the future.
For the day the level 5150 may again act as the major resistance and sustenance about it will lift the market to 5200 with
a major hurdle at 5165. On the lower side again the level 5080 may act as a major support for the market and failure to
hold the same may again weaken the sentiment to a psychological support at 5000.
Sector specific, we may expect out performance in Capital Goods and Infra, Oil and Gas and FMCG. We may expect profit
taking in Auto stocks and banking sector will remain stock specific. For pharmaceutical stocks our advice is to be a buyer on
declines. Technology will still remain unpredictable due to volatility in currencies.
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Concentrate all your thoughts upon the work at hand. The sun`s rays do not burn until brought to a focus.
- Alexander Graham Bell
