Posted By : Kishore B.S
The markets surprised everyone by giving an upside. Everyone was expecting the markets to touch 5200 atleast once. But this sort of rally might be a trap for the retail investors. The operators might have took the market to 5364 so that people start buying and all those who have shorts cover their shorts. Markets are very tricky. So, right now i wont recommend any trading. Still, if you want to invest shorting the market in small volumes is a better option. 5400 is a very strong resistance and taking that off will require a big positive news.
European markets are flat. American markets are trading very firm. The economy is showing good growth. But is it so strong that justifies American markets trading at May 2007 levels. I don’t think so. According to me there is going to be a correction very soon. Its natures law whatever goes up has to come down. Its only a matter of time.
Crude prices are rising. This will have a huge negative impact on markets all over the world. Also, rupee has depreciated to above 50 levels which might be a trigger for FIIs to exit the Indian markets. As said earlier the market is very tricky here. With expiry next week it becomes trickier. It would be advised to add shorts in small volumes. Be patient and watch markets carefully.
(Inputs: Mr. Shubham Deva, An Associate of Stock Market Institute, IIT Kanpur)