NIFTY 50 INDEX – Gap up can happen
11100
The Indian
stock markets have shown good resistance in respect with the defeat of the
ruling BJP in three states ahead of the next year LS elections. The crude oil
prices have softened, easing the burden on the central government fiscal front,
the export – import balance of payment front and the economy as a whole which
uses the petroleum produces at every step of commerce. The market has also been
digesting all DOW JONES falls along with its Asian counterparts. There is also
lack of bad macroeconomic data, result season is not going on and many macro
data is coming positive. With new RBI governor appointed from goodbook of PMO
has also removed the newsflow of RBI and Govt. tensions.
The
market can again get into sell off move if global markets start to sell of on
the back of huge panic selling and sell off in USA DOW JONES markets. However,
the Indian LS Elections is not a trigger right now as it is still far away many
months before that we will see a budget from the incumbent government.
The nifty
50 index can open gap up in absence of any unforeseen bad news to around 11100
which is currently at 10950 levels. If this happens then we may see further
immediate upside or possible consolidation, in both cases we are bound to see
the continuation of the midcap rally and individual stock specific decent
upmove in frontline stocks as well. Remember, this rally is not supported by
good volumes so take profits and keep mentality of getting in and out. At the same time it must be kept in mind that 10950-11000 is the short-mid term resistance level and if today it closes around the present level and makes a DOJI candlestick formation and opens gap down or goes down significanly after opening flat or up then it will make a bearish pattern right at the resistance level, then we will again fall into a sideways trade decline and possibly a follo up sell of may be on the back of the global markets fall.
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