Home > Market View, NIFTY Strategy > NIFTY at 4850 – Bullish or bearish?

NIFTY at 4850 – Bullish or bearish?

Wednesday, October 28, 2009 Leave a comment Go to comments

As  expected, the correction was unexpected and deeper. As the markets had failed to keep 4980 levels, a slide to 4900 was more or less expected. A slide below 4900 came because of certain surprises in the credit policy. Markets always find a reason to correct themselves and throw out the leveraged players.

Looking at individual stocks, there was a sell off in literally every stock- from banking to real estate to metals. Telecom stocks like Bharti continue to fall despite having fallen so much! The stock is staring at hitting 270 and 240, levels which might see some bottom fishing.

Coming to broader markets, 4780 is another critical level where some buying might emerge. The more difficult part is figuring out your “buys”. Right now FMCG, Pharma,Auto and banking look the best bets. Suddenly IT which is not interest rate sensitive is looking better.

The biggest risk to this market is the fear of interest rate rise. I had talked earlier about inflation in the Indian economy and how RBI might soon turn aggressive in  containing that. This is acting as a big trigger for the sell-off.

There is a lot of build up in the futures and options space as is evident by largest ever F&O volumes yesterday. This might put added pressure on the market as long unwinds happens at a faster rate.So you might see F&O stocks bearing a lot sharper corrections than non F&O ones. Technically a slip below 4780 will bring in more selling.

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