Where are the Markets headed??



The Markets had been trading in a price channel since last September. We witnessed a breakout from this level at the levels of 18k, and we saw the market’s rally to the levels of 20k+. This was mainly attributed to the FII Money pouring in the Indian Markets. The FII Money being poured was around Rs.27500crores in the months of September - October, over a span of 20 - 25 days alone! Thus, the rise can be majorly attributed to the hot money poured in by the FIIs.
However, post the occasion of Diwali, where in the markets peaked based on the positive sentiments of the retail investors, along with the success of Coal India IPO, the markets have gradually shed around 500points since then.
Analyzing the data available, the DII`s (Mutual Fund Houses) alone have sold equities worth of Rs.1159.41 crores, since the beginning of November, whereas the FIIs have been net buyers of Equity worth around Rs.8690.35crores. Thus, the Net flow of the money being Rs.7530.94
Considering a strong presence of the FII`s in the market along with the FPOs/IPO`s of Power grid (currently open for subscription), Hind Copper, SAIL, MOIL and others which would follow, the FII`s can be expected to stay here or a while, although the DII`s face redemption pressure, which result in intermediate correction.
Assuming markets to be enroute a new high and based on the price channels witnessed in the above chart, markets are likely to see the levels of 21,130 and if it crosses this level it can go up to the level of 21,879.
On the downside, the markets could test 20,200 in short term; however it has strong support levels 19850-19900!