SMI- Market View – 5th October

Posted By : Kishore B.S

Hi Friends !!!!!

Our markets zoomed past the hurdle of 5730-5750 mark yesterday after the much long and impatient waiting by the participants. The rally seemed quite content with the index reaching the next resistance level of the 5800 mark though it failed to crossover that.
The rally yesterday attains significance since its a clear indicator that the rally witnessed in the past one month is here to stay and that the bears are getting completely cornered by them for time being giving no relief to the shorts and making them cover their positions thereby inching up the indices day after day.
Given the past bitter experiences it would not be unwise to state that the rally is not here to stay permanently and that unless the participants turn completely bullish no relief of correction or downside will happen. Since markets are always unpredictable and in the direction least expected.
The same seems to be happening even now, the technical charts are pointing out that the rally is getting back again into the overbought zone and that the rally is similar to the one experience during the month of Jan of this year which took everybody by surprise by inching up by nearly 20% on one stretch and when compared to current rally of just 11%.
Also the charts are indicating that there has been intermediate cool offs during the current rally due to which we still have further scope to rally to the 5820 mark in the days to come before the sell off really kick starts.
Hence unless the 5730 mark is held it would be wise to be on the side of the trend which is clearly UP……         

(Inputs Mr. Hemanth.V, Faculty TA, SMI – Bangalore)
Team SMI


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