Monday, June 8, 2009

Market Khabar 8th June 2009

Markets may cool down before Budget

June 8th, 2009
By C. Kutumba Rao

on the rise for a 13th consecutive week, the benchmark indices recorded the longest winning streak since August 2005. On the Bombay Stock Exchange (BSE), the Sensex ended at 15,103, adding 478 points, or 3.27 per cent and the broader Nifty on the NSE advanced 138 points, or 3.1 per cent to 4,587.
CNX Midcap and BSE Smallcap indices gained 6.2 per cent and 7.9 per cent reflecting “exuberance” of retail investors. The President, Mrs Prathiba Patil’s speech to Parliament indicating that the government will focus on reforms in financial and infrastructure sectors and selective disinvestment of PSUs provided the necessary “fodder” for tired bulls to extend the rally. Though there are no tell tale signs of correction, overheated markets may ‘cool’ before the end of settlement and the Budget, say savvy analysts.

Barring any negative news flow on economic front and global cues, markets may witness stock specific activity and “rotation” of sectors from momentum traders in the near-term. For the week ahead, chartists predict a trading band of 14,700-15,600 for the Sensex and 4,380-4,760 for the Nifty. Resistances for the week would be at 15,290 and 15,540 and 4,645 and 4,760. On downside, expect supports for the indices at 14,820 and 14,590 and 4,480 and 4,360.

Avoid short-term logs, if indices trade below the first supports. Markets change continuously and so must traders and investors. What worked last year, last month, or even last week may very well not work today. Be flexible, do not overstay in a market or try to cherry-pick the top or bottom. Do not let your greed get the better of your judgement.

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