There seemed to be perfect rhyming amongst the words Mirage and Carnage during the session yesterday, the mirage that was prevalent during the trading session of Monday and Tuesday was first broken during the Wednesdays session and yesterdays session was Icing on the cake for the bears.
The Gains posted for the last 2 months, by the Indices and especially the Large Caps where completely taken off, most of the Metals and Banking stocks are now trading at their 6 months low now and many Mid cap stocks are back to their One Year lows.
Generally the Pre-Budget sessions are Bullish especially the years where the General elections are near due to the reforms and likely goodies the Govt is likely to throw, but this time the expectations are low due to the Fiscal Deficit, High Inflation and High Interest Rates neither of which is coming down and supporting the Economy from further deteriorating.
The technical charts are back to their oversold indicators pointing out to the fact that the markets are likely to bounce back again which would be a relief rally, but these rallies, are not bullish till the 5930 upper cap is taken off and would be valid only if the 5800 levels are held onto.
The Banking, MidCap and Metal Indices have been the major Oversold Indices which are likely to be back in the Limelight during the Rally, if that happens. And hence should be used purely from swing trade point of view……..
(Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)