Last week, I wrote that I would be more bearish than bullish. I was expecting the markets to break down and retest the levels of 5175. I also mentioned that the upside looks capped at 5500-5550 on Nifty, from where it may start a downfall if it doesnt sustain at the higher levels.
Exactly on Monday it made a high of 5562 and on Wednesday again made a high of 5553. But it did not succeed to close above 5550 and started to go down.
However, what is surprising is, it did not break below 5300-5350. The Nifty closed at the lowest point of the week at 5375 which pushes me to think that the bulls and bears are equally divided. This also means that the bigger bull run post May-June 2011 is in making and this time it will be stronger than all the past rallies. The way bulls are protecting the downside despite FII selling and very low global sentiments, it is now getting more and more clear that downside is going to be limited. But does it mean we are going up and away? I guess not.
The support during March is largely attributable to the long term insurance flows and some really strong hands buying after a 20% correction in the market.
I believe, that the current strength in the market might continue till the insurance flows exhaust completely. That would be around mid of April. And hence, in absence of any good news, we expect the markets to fail at the higher levels. It is quite difficult to assess what that higher levels could be. But looks like we are heading towards 5700-5800 region from where we would again show some signs of exhaustion.
Those who have invested rightly during the recent bottom can liquidate some part of their portfolio for the better entry levels in May - June. And those who want to hedge their portfolio can wait for Nifty to cross 5700 and then short.
Exactly on Monday it made a high of 5562 and on Wednesday again made a high of 5553. But it did not succeed to close above 5550 and started to go down.
However, what is surprising is, it did not break below 5300-5350. The Nifty closed at the lowest point of the week at 5375 which pushes me to think that the bulls and bears are equally divided. This also means that the bigger bull run post May-June 2011 is in making and this time it will be stronger than all the past rallies. The way bulls are protecting the downside despite FII selling and very low global sentiments, it is now getting more and more clear that downside is going to be limited. But does it mean we are going up and away? I guess not.
The support during March is largely attributable to the long term insurance flows and some really strong hands buying after a 20% correction in the market.
I believe, that the current strength in the market might continue till the insurance flows exhaust completely. That would be around mid of April. And hence, in absence of any good news, we expect the markets to fail at the higher levels. It is quite difficult to assess what that higher levels could be. But looks like we are heading towards 5700-5800 region from where we would again show some signs of exhaustion.
Those who have invested rightly during the recent bottom can liquidate some part of their portfolio for the better entry levels in May - June. And those who want to hedge their portfolio can wait for Nifty to cross 5700 and then short.
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