The struggle continues for the bulls, with the NSE Nifty once again failing to surpass the 5500 mark after being within striking distance of the milestone. Weak trading volume last week underscores the fatigue factor though select Small-Caps and Mid-Caps continued to reign supreme. Globally, the situation is far from comforting with questions now being raised about the strength of the US recovery. In fact, there is speculation that the Fed could have to unveil a fresh round of stimulus to kick-start the economy. Surprisingly, Europe appears to be holding up quite well though it also is not completely out of the woods. Uncertainty also continues over China's growth prospects.
Fundamentals remain sound. Inflation is a major headache and could continue to be the biggest bug-bear for the markets for some more time to come. However, as long as Economic Growth doesn't falter, there should not be too many hic-cups. On the contrary, good monsoon showers might help ease prices going forward. One latest cause for worry has been the mixed report card of India Inc. Fast earnings upgrades may have to wait. Still, FII inflows are likely to remain strong. In the near term, the market will continue to consolidate with a positive bias. One will have to have loads of patience to endure this ongoing consolidation, but one can reap a good harvest once this phase is over.
The market this week will be keenly watch some of the important Q1 results. Some prominent among them are SBI, Bharti, Tata Motors, Tata Power, Ranbaxy etc.; The data on industrial production which is due forThursday could also provide some short term market direction.
FOR TODAY: Asian markets are trading almost in Green except Nikkei which is down nearly 100 points (1%). SGX Nifty covered some of its loss from -40 to -7.50 and presently trading at 5439.50 which indicates that Nifty may also open flat on positive side.
However, NIFTY may show weakness in crossing the range 5472-5487 and expected to test the support range 5377-5393. Traders are suggested to sell at gains. Banking stocks may face selling pressure at gains. FMCG and Cement might attract buying.
SELL NIFTY FUTURE around 5466-73 with stoploss 5488 and for a target of 5422-5406.
