NIFTY Health Check 3/14/2014

NIFTY Health Check 3/14/2014

Indices has rallied so far but it’s not all rosy as it looks. Lack of investment options make investors, domestic and foreign entities alike, to dump money in handful of stocks which in turn boost the Index.

Following chart shows how market has performed after bottoming out during the 2008 – 2009 crisis. Midcap hasn’t got any love so far and that shows lack of depth in the market. Large-cap and bank stocks are making the index hit new highs. Worries about increasing NPA ( Non Performing Assets ) within banks portfolios made them untouchable few months ago and bank stocks retraced a lot but election euphoria has left no choice but to ignore everything and go all in to take advantage of the rally. Most major constituents are at or near the resistance points ( Resistance areas for ┬áICICI – 1250, AXIS – 1400/1500 , YESBANK – 390/400 ) and in this situation it’s interesting to see how high a rally in NIFTY can go! If election brings us some insane highs then that will be a good short opportunity. Till that time, it’s better to join the crowd and buy the dips in nifty between 6200 – 6400 for the short term to take advantage of any quick rallies towards 6900/7000. Again, best way to play this would be via options since this is just a speculative trade idea and not backed by good fundamentals.

NIFTY, BankNifty and NiftyMidCap

NIFTY, BankNifty and NiftyMidCap