CURRENCY VIEW

MARKET VIEW

This pull-back will last as long as the market does not breach the recent low of Sensex 20161 and Nifty 5972.

Bulls seems to have taken off for a holiday after taking Sensex to all time high levels on Muhurat Trading day. However, Nifty just about missed breaching the all time high levels. Both the indices have retraced after testing the peaks. After eight consecutive days of fall, market has managed to bounce back on the last day of this week. But the bounce back was interrupted due to the high inflation figure released during the day and as a result the Nifty almost gave away around 50 points from the day's high level. We are witnessing a minor pull-back as long as the recent low of Sensex 20161 and Nifty 5972 holds. Strong Uptrend will resume only when Nifty closes above 6201.

The market has now moved towards the 5970 mark and bounced off from oversold territory. Thanks to the soothing talk by the RBI Governor, the  markets rallied on Thursday, but failed to hold on the strong early gains throughout the session. Going forward, we are of the view that the chart has changed and the bears are likely to push the bulls to the wall over the next 3 to 5 weeks. Technically speaking, with the breach of 6079, the recent swing low on the daily chart was taken out with a rise in volumes. The daily momentum oscillators are in deeply oversold territory after a 7 day losing streak for the bulls. This pull-back will last as long as the market does not breach the recent low of Sensex 20161 and Nifty 5972. The prior uptrend will resume only if Sensex closes above 20878 and Nifty above 6201.

On domestic front, as the election mania is likely to gain momentum in coming few months, market may turn highly volatile and may witness wild swings. Correction post Muhurat trade has definitely made market stronger for mark new highs going forward, but for that, walk of the talk is needed as we heard many talks on re- forms, walk of the talk is still missing. SEBI announcing REITs may augur well for Realty sector, but hope for home loan rate cut is steel a far fetched dream for a while.