Once again amid mixed news flows, and expected positive earnings, the market last week remain in the range and manage to do well on Friday to end the week finally on positive note. The range bound trade is expected to continue in the market with the bias of upside until the crucial forthcoming Assembly Election of Karnataka, Since the earning factor is behind us reporting moderate growth one should closely watch for the upcoming monsoon, Govt. Reform policies, Inflation and the outcome of Assembly Elections of Karnataka, all this factors are very critical for market and the behaviour of the market will depend on what unfolds. The positive outcome of above fundamentals can surely see sharp rally in the markets upwards and any measure negative news like the loss of elections by BJP Govt, poor monsoon and slow down in reforms could slide the market down to even test initially 10400 but perhaps even 10000 and lower
Technical – The Nifty have broken out from an important level of 10600, Going forward if its manages to stay above this level then it will move higher, However since the market have gone up at a slower momentum, hence if it fails to cross the resistance of 10900 and goes below 10600 it will witness a secondary selloff and this correction would take the market to 10400 or even to 10000. The broader range for the market is 10400 and 10900 and extreme short term range is between 10800 and 10500
Investor should remain stock specifically optimistic on the market, but should refrain from investing in Stocks with higher Debts and poor governance. One is further suggested to be atleast 10% to 20% in cash.