Markets were up for the third straight week. Nifty ended up half a percentage point 7 points shy of 8800. RBI policy was a non event. Result heavy week say individual reactions and a mix batch of results for a lot of companies. The 8800-8900 journey is likely to be faced with a lot of supply and resistance.
Global markets all across the world hit their respective life highs. Dow is strong above 20k and although looking overbought the euphoria continues. This will have a clear ripple effect for our markets as well. Like stated in my last blog although exhaustion and overheated indicators point to a stall in the current rally, markets could well be headed higher.
Results season will continue on D-Street and individual stocks will have reactions of their own. Markets will still be in a sideways to bullish tone. Correction is overdue but it seldom happens when all expect it to. Sentiment seems bullish and some caution is advised.
I still restate last weeks outlook. Fundamentally as well as Technically market looks overbought. At 22-23x PE and mix results, such hefty valuations are difficult to justify. Charts show some stalling and sideways movement could happen. If a negative trigger is played out correction may be on its way. Having said that all longs must be protected with stop-loss and no shorts should be open.
In individual stocks one can look at Machino Plastics. Results are expected on the 16th and stock has given a breakout with volumes. One can look for targets of 290-295 with a stop-loss of 230. CMP stands at 258.
Keep an eye on the liquidity, FII flow and the beginning of UP elections for the next week. These may well dictate markets domestically. Globally speaking it’s all too calm as of now and nobody knows when or what the next trigger of news flow will be