"It is one of the historic day for our indices, since Nifty crossed and closed above 5000 for the first time ever, simultaneously Sensex closed a 17150, with one of the largest trading volumes on a settlement day. September has been very rewarding for investors, as markets world wide moved very strong and fast after Fed decision to cut rates by 50 basis points on 18th; With settlement being over smoothly, rollovers also healthy, now the expectations on the Q2 performance will be priced in from now on, and markets will reward the performing companies and punish the ones which fail on guidance and also unable to meet expectations. Thus, lot of churning of portfolios to take place, pricing in further rate cuts, econonomic performance, political risk/situation etc., which will provide ample volatility in the days to come. Nifty futures closed at 8 points premium to the spot, presents bullish outlook for the day. Today is the last trading day for the week, month and quarter and how the indices close will present the indication for future trend, in our view it would be "up" only.
US markets closed postiive, and Asian markets are trading negative to flat in opening trade, our indices might face resistance today at higher levels, as next week is a truncated one, and profit booking can be expected, bringing 2 to 3% fall indices today or on monday, which should provide good buying opportunity, for long term investors. FIIs have been net buyers in our markets for the past 10 days on margin against DIIs who are net sellers, keeping the upward momentum of the indices so far. The larger traded volumes per day, while indices make new highs daily is welcome feature, the market breadth is generally negative as retail investors are booking profits around 17000 (Sensex) and 5000 (Nifty) is a discomforting feature.
No doubt that we are in a long term bull markets, however, even running corrections whenever happen will be sharp, swift and sudden, so entering markets with leveraged funds, should be avoided from here on.
Since the indices are in an unchartered territory, resistances cannot be predicted, only supports to be observed, whether held or breached to know and ride the trend which is up now on:
Short term support for Nifty shall be 4940- 4880-4760-4678-4648-4564-4530-4480 and for Sensex shall be 17000-16876-16500-16135-15950-15870-15600-15485
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