A very Happy New Year to all our readers.!!!
2010 has indeed been an eventful year with the broader markets performing better giving about 15% returns amidst recovering global economy.
The key highlights for the stock markets were record FII inflows into the economy post the Quantitative Easing (QE) in the West, the aftermath of the European debt crises, the increasing commodity prices in metals, crude and precious metals, the plethora of scams on the home front, tightening liquidity by rising repo and reverse repo rates by RBI to tame the inflation, etc.
Sectors that performed include consumer durables, Auto, IT, etc. Even banking sector was among top performers till the end of the year when the bribe scams was unearthed.
The underperformers included Realty, Power, etc.
Looking at the year ahead:
Sensex had cleared a crucial hurdle of 20050 this week after showing some flatness for 4-5 days in this week. (http://thefallingwedge.blogspot.com/2010/12/outlook-sensex-crucial-week-ahead.html)
The sensex has closed above 20500 and Nifty above 6130. The markets have been positive for the three consecutive days ending 2010.
The outlook for the coming months is positive with the first resistances coming at 20720 for sensex and 6170 for Nifty. Crossing that, markets will remain bullish. The RSI level has gone into the 70+ space which may provide resonable resistance at these levels.
Also there is moderate support at 20330 levels and strong support at 19900 levels for the Sensex. For the NIFTY, strong support at 6030 levels.
As for sectors, the mining and minerals, the IT, the auto sector are looking good to invest in. The realty sector must be watched for as at the end of the year, there was some solid buying in DLF, LIC Housing Finance, Indiabulls Real estate, etc. to name a few. These stocks have taken a solid beating in the year and reversal patterns should be watched out for. Also the Banking sector is to be watched for positive signals after many of the stocks fell just after the bribe scam.
Some of the good picks to invest are Tata Steel, PVR Ltd, Hindalco, which have given positive breakouts as indicated
(Avoid Sesa Goa as the targets have been achieved)
Other stocks to be watched are: (refer to the respective charts for details)
1. Larsen & Toubro - Short term (6-7 days)
1. Ashok Leyland - medium term (about 12-15 days)
1. Axis Bank - Short term (About 6-7 days)
Happy new year once again. Have a great year ahead.
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