SMI –5th November 2013 – Market View

Posted By : Kishore B.S

Hi Friends,

The battle between the bulls and bears continue. Everybody was waiting for Diwali expecting the markets to ride on a rocket and reach all time high. That event is done now with Nifty closing at 6317. Today it is trading 50 points down around 6250. We have been constantly telling that these high levels are highly unsustainable. It was the positive momentum due to RBI policy and Diwali fever that took Nifty to such high levels.

As of this week we don’t have any major event, no major data or no major result. So, the domestic cues is what will govern the markets this week. Nifty is taking a breather and investors are realising that all is not well with the domestic economy. The string of data like HSBC PMI index, RBI’s growth forecast etc. which pointed that growth has not bottomed out is catching on to the investors.

It is amazing that when Nifty is touching all time high, all the analysts are pointing that it will go t0 6500 or 7000 levels. They are not paying attention to the economic woes and just being carried away with the market. Now we can are thinking logically and telling that these levels are not sustainable. Now we can also be wrong. But our prediction is based on reasons. So, that is a risk we need to take.

The global markets are also taking a pause. All the markets are trading almost flat with a positive or negative bias. Markets seem to be overbought right now. So, there are no new participants. They are waiting for the next trigger.

Indian and global markets are at all time high. So, a major profit booking is in sight. Now this profit booking can also result in panic selling. All those investors who got in at such high levels might turn panicky and start exiting their holdings. So, we advice everyone to be cautious.

Cheers  !!

Team SMI

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