Sensex up 10% from December lows; investors should stay put despite B-Day volatility
Not surprisingly, in such bullish undertones, the negative quarterly results were disregarded and stock prices defied all logic to inch higher.
Yet shrugging off all negatives, stock prices continued their upward march. This is in itself the biggest indicator of the bullish undercurrent in the market, and nothing is louder than this.
Events of the week:
The formulation of laws last year- Bankruptcy code 2016, Amendments in SARFAESI Act and professionalization of banking boards seems in totality a complete solution to the hitherto fragile banking sector.
It looks as if it's the start of "Ache Din" in the PSU banking space.
The prices have touched the upper channel which will most likely attract profit booking. Traders should be cautious during times of high volatility and take a reactive view once the budget is over.
Long positional trades should be trailed with stops below 8,300, while short-term traders may partially book profits and trail the balance below 8,450. Traders should buy on dips while investors should hold on to their portfolios.
Expectations for the week:
Almost all housing finance companies have reported double-digit growth rates, which has exemplified the benefits of demonetization, and for the first time given a ray of that the measures were in the interest of the economy.
Yet FPIs haven't started big time investments in the Indian markets. Hopefully, post budget, they will restart with a vengeance as they have been left out since the markets are already up by 10% from the December lows.
Budget day movements historically have been in line with the underlying current of the market which is buoyant this time around with a lot of hopes and expectations.
The undercurrent of the market is likely to remain strong irrespective of the Budget which may cause a single day wild fluctuation. Investors should keep on holding stocks in their portfolio. Nifty50 closed the week up by 3.50% at 8641.25.