Clearly, news seems to be more important than many other fundamental factors in recent times, so in that sense, macros are ruling as of now.Now, with the new government not having announced anything in the budget, its obvious that they will keep announcing one reform here one there, so probability of positive news coming in from time to time is high in the next one year. Yes, negative economic data will come from time to time from the US ( e.g. CIT going kaput), which will drag the market lower but will have less impact than the positive local news. With this hypothesis, overall sentiment seems long to me in the medium term. Why its not so in the long term is because lending still hasn't started yet. Whatever little is happening, its by the governments, so without any capacity building in the private sector, where is the 9% growth going to come from, something to this effect was pointed out by my able friend Ken. so, up for 6 months yes, then either drag, stagnation or some fall back in the markets cant be ruled out.
Now to the charts:
Nifty - I think looking at only daily data makes sense for main theme, which only should be confirmed by weekly or monthly trends. So what am trying to say is, daily movement should be the guiding factor, more so with the way things have been in the current market when:
stage 1. news comes, market moves in one direction for 3-10 days,
stage 2. if more news comes, move continues else market starts to turn choppy
stage 3. opposite news comes, and a revese trend starts for 3-10 days.
clearly, by the time things start reflecting on monthly data (weekly will still be ok), things start changing.
Daily - Stochs positive, RSI positive. momentum about to turn positive. Elliott wave upward 3rd point to be formed so room for more upside. previous highs were 4390, 4424 and 4517, 4655. current close is 4375. good candle (don't remember the name). just outside KLT but within BB.
Weekly & monthly data : room for upside as seen in KLT. stocks negative and RSI is alos about to head in overbought zone, overall seems like the week's 10% positive run is about to reach an end, but may take a few days, to go up it needs to break the 4424 level on weekly and 4448 level monthly, awfully close, which i think can be a kind of momentary stop before the market chooses it next course.
Other thing to watch will be the earnings, which am not so worried about, clearly all analysts were playing safe by being overly pessimistic. However, CIT may have an impact, not in this week but in the weeks to come, if there are too many strings attached.
Now to the charts:
Nifty - I think looking at only daily data makes sense for main theme, which only should be confirmed by weekly or monthly trends. So what am trying to say is, daily movement should be the guiding factor, more so with the way things have been in the current market when:
stage 1. news comes, market moves in one direction for 3-10 days,
stage 2. if more news comes, move continues else market starts to turn choppy
stage 3. opposite news comes, and a revese trend starts for 3-10 days.
clearly, by the time things start reflecting on monthly data (weekly will still be ok), things start changing.
Daily - Stochs positive, RSI positive. momentum about to turn positive. Elliott wave upward 3rd point to be formed so room for more upside. previous highs were 4390, 4424 and 4517, 4655. current close is 4375. good candle (don't remember the name). just outside KLT but within BB.
Weekly & monthly data : room for upside as seen in KLT. stocks negative and RSI is alos about to head in overbought zone, overall seems like the week's 10% positive run is about to reach an end, but may take a few days, to go up it needs to break the 4424 level on weekly and 4448 level monthly, awfully close, which i think can be a kind of momentary stop before the market chooses it next course.
Other thing to watch will be the earnings, which am not so worried about, clearly all analysts were playing safe by being overly pessimistic. However, CIT may have an impact, not in this week but in the weeks to come, if there are too many strings attached.
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