It is Thursday morning and it is the day after the biggest single day gains on the Sensex. It was a historic day and the mood cannot be that bad. The US markets are down and as a result Asian markets are trading flat not that they have been swinging to global cues.
We got humps like 20,000 on the Sensex and 6,000 on the Nifty to cross. Let us see whether we will take those out or consolidate in today’s trade. The mood is definitely good in today’s market.
Is there a 20,000 watts bulb shining at the end of the tunnel today?
Very likely because after yesterday’s closing at the highs of the day, the sentiment would be very strong and the global cues are not significant enough to break sentiment so whether the market chooses to pause around 20,000-20,100 levels, the previous highs or the Nifty also takes a bit of time off before it crosses 6,000 conclusively is a different matter but today the mood cannot be too bad going into trade.
A little higher maybe touch of profit booking should not be ruled out because we have come back to the old highs and while lot of people do believe that the market is good enough to go and power to new highs at least at the old highs there could be some profit taking so maybe a bit of circling around previous highs possible but would be very surprised if we do not see 20,000 on the screen and maybe even 6,000 at some point in the day today.
On Asian Indices:
It is quiet across Asia after what happened in the US, Asia rallied quite a bit yesterday, but today they are very subdued; Nikkei is up a bit, China is flat, Hang Seng is down a bit, Korea is down about half a percent. No great cuts, no panic, just about a flat morning of trade, which is fine.
Have we really taken that U-turn for good?
Well it seems like that because we are back to almost to old highs and with the little bit of help this morning we will get back to those old highs. Now whether that invites a little bit of profit taking and people still remain circumspect we’ll have to see but it would be surprising if the second attempt does not break through into and a slightly higher level for the market.
As you get progressively higher I think questions will be asked once again about the global situations then interim liquidity situations, valuations etc.
If you ask the smart guys on the street I don’t think too many of them at this point are prepared for 22,000 plus kind of levels. Since we are approaching the new highs and if we take that out of the bit of a spill over will always happen. So I think people are bargaining more like 6,200-6,400 on the Nifty maybe 21,000 odd on the Sensex because we are getting into the new high zone but beyond that people seems to be a bit circumspect.
Which does not mean that the market will not go higher so we’ll just have to wait and watch but first this morning I think there is a little bit of hump to cross that old high and if we can take that out and if we can effect a closing above 20,000, which we haven’t done maybe the mood will change and in the near-term that may fuel another 5,000 to 7,000 points rally up on the Sensex.
It is entirely possible that we go on to a new high and maybe form a new high by some margin in this kind of momentum move quite possible but today will be an interesting day particularly in this second half on whether there is some profit taking and whether we can actually manage to hold above and close above those 20,000 levels because that could be significant for the near-term trader sentiment.
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