After falling close to ten per cent since the Union Budget, the benchmark indices surged more than three per cent on Tuesday, the highest they have risen in more than a month. The Sensex rose 453 points to close at 13854 and the Nifty by 3.46 per cent at 4111.
Analysts attributed it to a combination of good global markets and domestic short-covering. The Dow, Hang Seng, Nikkei, FTSE and CAC were all trading positive.
But volumes were thin, showing that it was not a conviction-based rally but a technical bounce back. “After the bearish mood of the whole of last week, there was a lot of covering of short positions as the markets were trading at low levels.” Market men also said that the possibility of the monsoon picking up could have added to the surge in the markets.
Initiate long positions if the Nifty sustains above 4,100-level on closing basis. Sentiment indicators do not indicate any sharp rebound, but suggest reduced volatility in the near term.
We recommend our clients to wait and see and be in cash till market consolidate at some levels and wait till Q1 results season for good gains. Accumulate the stock which displays good Q1 results.
Today market may display sideways movements and some profit booking at higher levels. Watch results counters like PFC , Welpsun Guj , India info and Aban offshore will be swinging heavily. Tulip counter is in Positive trend and look for madcap IT counters like Tanla , Sasken, Tulip , Redington and also MIC elctronics.
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