Profit-booking and consolidation is more likely than another test of the 4,500 level. The market hit upper circuits for the first time in its history. After a high of 4,509 on Tuesday, the Nifty weathered profit-booking and closed at 4,238.5 points for a whopping gain of 15.4 per cent.
The Sensex exhibited similar behaviour, to cross 14,000 before closing at 13,887 for a gain of 14 per cent. The Defty gained 21 per cent as the rupee rose by 4.65 per cent to Rs 47.19. The election results have caused a phase change. Volumes multiplied with a couple of record sessions. Advances outnumbered declines by a large number. Almost every sector and every index registered double- digit gains.
Settlement is coming up. Profit-booking and consolidation is more likely than another test of 4,500. The market has twice found support at 4,150. There is resistance at 4,300. The most likely trend is volatile range-trading between 4,100-4,300.
Given that almost every stock gained week-on-week and most stocks went through profit-booking in the past three sessions, it's difficult to pick likely winners. We've seen price rises with volume expansion across the board. We've also seen correction on profit-booking. Many counters still seem over-extended. Support and resistance levels are difficult to calculate because of price gaps.
Even the IT sector went up despite the strong rupee on the back of second-rank stocks such as NIIT, FSL, Rolta although TCS and Wipro saw losses.
But the biggest winners were the financials and real estate counters with several infrastructure companies also doing exceedingly well. There was also some speculative interest in PSUs that could be potential disinvestment targets.
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