NIFTY rally - How much steam left?

NIFTY gets back to order, conquers global peers to line up second in growth on the world order. Nifty has recorded a gain of 6.71% since January this year. Second only to NASDAQ, which has gained 5.91% since then. The turnaround has come after forming good technical strength on the daily chart, which is likely to rally further. Though there seems to be some tiredness setting in as volumes did not catch up the speed of price move on Friday. This rally which began with a 25% above average volume has slowed down to -5% on Friday, this is a point of concern.

Finance takes lead followed by Infrastructure and reality. Like a wave of magic wand, history repeats itself time and again, if a turnaround has to be perfect, it should be lead by the financials followed by the emerging sector. So, we have proof enough for confirmation that the rally is safe at least till the major resistance at 5150 on the Nifty. For a cyclical turnaround, Financials will be followed by Basic Materials, so do we have it playing out now in the same order with non-ferrous metals Industry group in the sector doing well.

Our NH-NL index is yet to move up above zero even after the big run up in price last week. This is indication that we should look for some weakness coming up shortly on the NIFTY. As the weekly chart is still bearish, a tick down on the daily is a shorting opportunity. As the market trades by we shall find a right opportunity to short.

Banking Index, the leading index this week has BANKBARODA, UNIONBANK, HDFCBANK, UNIONBANK doing big rounds of gains. We had almost all of these stocks recommended in our calls section and many traders hold good profits from their positions. HDIL was a star in Reality of Friday followed by Larsen & Reliance Infra on the Infrastructure side.

As the market goes long on many stocks with a trend reversal signal, some are doing great now. Traders need to be cautious as the broad market is not yet out of the bear hug. Please do not get sentimental or emotional about your positions. Once you find that, your stock is not doing what you want it to do, get out and watch the fun from sidelines. We are here to do business, the business of making money. So no room for sentiments or emotions but, be strict with your plans. Do not make decisions when a position is in progress. Just only think about executing your plans. There can be losing trades, there can be a streak of such trades, but believe in your system. If it has given you money earlier, it will for sure give you in future too. Persistent effort with discipline will fetch you the returns you need to have.

Have a Happy Dream, and make it true. YOU WILL, YOU WILL.

Team BraViSa.