MARKET OUTLOOK

The appointment of the new RBI Governor and his market friendly approach has reinstated belief that there is at least some light at the end of the tunnel. The measures announced by the visionary and his body language on the very first day of assuming office led to a strong move in equities and currency markets. Momentum oscillators on the daily and the weekly charts are positively poised. The “bullish hammer” candlestick pattern is also confirmed and signals possibility of a further up move. Considering these technical evidences and the charts of other individual index heavyweights, we are of the view that the market can move higher towards 5900 over the next 3 to 5 days. We remain positive and advise traders to buy into any decline. Only a move below the 5500 mark would mean that the wave count and market outlook needs to be revised. We suggest that traders buy into banking and oil and gas counters to make superlative gains over the next few sessions. The risks to the above analysis are the Syrian conflict and the US FED tapering. In case the US decides launch military action against Syria, oil prices will surge and the Rupee depreciate again. Also, the US FED tapering which is likely to begin in this month may have some effect on the markets. However, the charts don’t lie and the probability of these mishaps occurring, seems to be bleak at this juncture.