A yet another week with a narrow range and consolidation ends for
Nifty. Muted global and domestic cues, lower volume and post major
events kept Nifty in a hangover.
Nifty spent its third week
between 11800 - 12000 as indecisiveness was seen with no clear trend
being able to establish. Consolidations near all-time high can result in
either continuation of the trend or distribution at higher levels.
Breadth has been low mostly stocks have seen short
built up. almost 143 stocks were in short built up while only 22 stocks
were seen with long built up. This also indicates the weakness in
breadth.
WPI inflation
numbers slipped to 2 year low which is good for the equity market as the
recent rate cut would further infuse some more liquidity into the
system and try to loosen the credit stress. Secondly Nifty is now all
set for the Budget and probably we will be seeing that factor in.
There are multiple things that are in favour at this point in time. A
rate cut coupled with GDP growing faster than other Emerging or
Developed economies, Lower Inflation and a Decisive Government. To add
the cherry on the top we have Crude around $50 mark and in the bearish
mode which is again providing another headroom for the government.
Technically, We are still in an uptrend but the market seems to be dull
and stalling around all-time highs. On the downside 11800 has been held
for quite some time and should hold if bulls need to be in power. Any
failure there will call in for a short term correction to 11600 - 11550.
Sustaining the line in the sand at 11800 would help bulls be in control
and move to 12050.
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