The Indices closed on a positive note last week, and on the daily chart as well. Its been the third straight weekly gains for the Indices since the month of November.
Though the december month and the current month January has started with positive sentiments, yet given the events that are expected and likely to happen will see to it that the markets and the Indices remain volatile to a large extent, where the Indices are expected to swing between the 5800-6200 range depending on the newsflow that is expected to trickle in.
If the technical charts are to go by as the Indicator for the future direction of the markets, then the charts are indicating that the markets are on the verge of some breakout zone, but a consolidation before that would be the most bullish indicator since that would help the bulls to forge ahead to the 6200 levels easily.
On the lower side the caution should be exercised around the 5880 levels which if broken would signal the end of the current bull rally and would favour the bears to the extent of a slide to the 5700-5560 levels. But markets are always unpredictable unless some critical events occur, and hence it would be worthwhile to wait and watch if the 6028 levels on the higher side is broken or the 5900 levels on the lower side is broken, and till then the strategy of buy on dips could be followed.
Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)