Market climbing the wall of worry

(By Mr.Jimeet Modi, CEO, SAMCO Securities)
Market opened the week on Wall Street worries but climbed back slowly on positive sentiments reflected through block buster D-Mart listing. Nifty’s reaction on US jitters isn’t a good sign for the Indian market. Market’s relentless up move has lead to 12 Stocks in the F/O ban list which is on the higher side, the first day listing premium, indicators of bullish sentiment, are pointing to high bullish sentiments which is the reason why any negative event from global markets lead to gap down opening in India. The ability of the Trump administration to pass key legislations would be the key to US market’s future and investors should keep an eye on such developments.

Events of the week: The famous quote of Abraham Lincoln, the most respected President of the Century had once said “Government of the people, by the people and for the people shall not perish from the earth” holds true for the present government in India as, hence forth the new policy will allow profits to the government too from the projects that are handed over to private companies. The abnormal profits that will be generated will flow to the government a policy rarely followed in India. In addition the pre NELP contracts will be renewed by the government provided 10% additional profits are transferred to the government coffers. This government seems to work for the people as well.

Technical Outlook: The market is entering into profit taking zone. Indicators have turned overbought at these levels. Prices therefore can cool down or enter into sideways movement. The market may come to fill the gap and touch the 9000 levels before making any decisive move up. Traders should buy on dips. All long positional trades must have a strict stop at 8850 levels on the Nifty.

Expectations for the week:

Global stock market movement will guide the direction for domestic markets in the short term. The passing of Affordable Health Care legislation will test the strength of President Trump and hence the mood of the market hinges on this event. Australia’s most respected weather forecast department has predicted El Nino this year which could potentially derail the rural recovery party, although it is still early to worry about this. The year ending compulsions would keep the market range bound subject however to US market response to Affordable Care bill. The market is likely to remain in sideways zone with a firm bias. Investors should remain invested and traders should buy on decline with strict stops. Nifty50 closed for the week at 9108 down by 0.57 %.