Generally there is a lot of momentum in the market there is no mistaking that. The volumes have steadily picked up these last few days and the breadth continues to be good. So I do not think there is any problem with momentum but the roaring momentum will only be visible once the Nifty decisively closes above 5000 and then late chaser get back into the game so it is possible that one or two days you might spend circling in a 100 point Nifty range around that 5000 mark.
Global markets have gone sideways and we may also spend a little bit of time around here because we touched a very important psychological level 5000. Often it happens that the market would circle around these levels, so its possible that we also spend a couple of sideways sessions or one sideways session around here consolidating yesterday’s move. But around what’s happening in the Nifty there is a lot going on in the market in the primary market, we saw what was happening with Reliance yesterday and also with aviation stocks yesterday. It’s still a very exciting phase in the market that we are in but after the recent run both globally and locally its conceivable that we just level off a bit.
It’s good that Foreign Institutional Investor (FII) flows are continuing to come; one good thing is that Domestic Institutional Investors (DIIs) are not selling in this rally yet. In the past when we have seen that insurance companies start selling and FIIs continue to buy, eventually the market does come down. The insurance companies have been playing it better than the FIIs because when they buy and FII’s sell eventually the market does go up, so domestic institutions are not selling. The one thing that you want to be a bit more careful about is where the retail participation is going because eventually when this market hits an intermediate top it will be on the back of some kind of a blow out of the retail participation. The put-call ratio is high but that’s not strictly retail. If stock futures, go off the boil and that’s the thing to start monitoring now, because already excitement is building up there. I think there you want to start getting a bit cautious again...
Global markets have gone sideways and we may also spend a little bit of time around here because we touched a very important psychological level 5000. Often it happens that the market would circle around these levels, so its possible that we also spend a couple of sideways sessions or one sideways session around here consolidating yesterday’s move. But around what’s happening in the Nifty there is a lot going on in the market in the primary market, we saw what was happening with Reliance yesterday and also with aviation stocks yesterday. It’s still a very exciting phase in the market that we are in but after the recent run both globally and locally its conceivable that we just level off a bit.
It’s good that Foreign Institutional Investor (FII) flows are continuing to come; one good thing is that Domestic Institutional Investors (DIIs) are not selling in this rally yet. In the past when we have seen that insurance companies start selling and FIIs continue to buy, eventually the market does come down. The insurance companies have been playing it better than the FIIs because when they buy and FII’s sell eventually the market does go up, so domestic institutions are not selling. The one thing that you want to be a bit more careful about is where the retail participation is going because eventually when this market hits an intermediate top it will be on the back of some kind of a blow out of the retail participation. The put-call ratio is high but that’s not strictly retail. If stock futures, go off the boil and that’s the thing to start monitoring now, because already excitement is building up there. I think there you want to start getting a bit cautious again...
