• Extreme bullishness is only a concern for the stock market and it may lead to some profit booking or consolidation, say analyst
It was a good week for the bulls, as Sensex and Bank Nifty hit record highs, while Nifty closed at record highs. This week, Nifty will complete its unfinished business by touching a new all-time high. The good news is that the backward, broad market is also trying to catch up.
Fall in dollar index and US bond yields following some dovish comments from US FOMC minutes created positive momentum across the globe, while fall in crude oil prices and short covering in F&O market boosted positive momentum in the market.
This week, our Q3 GDP numbers and monthly auto sales numbers will be the key domestic factors. On the global front, the market will closely watch data from the US and any further movements in the dollar index and US bond yields. Also, news flow from China will continue to cause some volatility.
Technically, Nifty may surpass its previous high of 18604, where 18611, 18888, and 19000 are the next resistance levels. On the downside, 18440 and 18300 are immediate supports, while 18100-18000 is a key demand zone.
Bank Nifty, leading the rally, showed some fatigue on Friday, but the overall structure is still bullish. On the upside, 43,333 is an immediate resistance, while 44,000 is the next target level.
The December series starts on a heavy note as FII long exposure in index futures stands at 72%, while Nifty sees high rollover with a huge premium of around 150 points. The Put/Call ratio stands at 1.18. Excessive bullishness is only a concern for the market and may lead to some profit booking or consolidation; However, the overall outlook is still bullish.
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