Market Outlook 24th October

Oct 23, 2013 No Comments by

Nifty at last gave up 6200 levels. It has been a constant fight between the bears and the bulls. Finally bears are coming out from hiding and giving the bulls a run for their money. Nifty dipped to 6120 levels in the noon trade but recovered in late noon trade to close at 6178.

Wipro posted better than expected results but still the IT pack was deep in red. Wipro itself was down by about 5%. We have been pointing out in the last few days that the market is about to take a u turn and that seems to have started.

The rally was largely led by banks and the IT pack. All the major IT companies have reported their results. The results were better than expected and the IT shares have rallied 5 to 10%. So, a correction for them is on the cards. PSU banks were up today on back of the news that government is going to infuse capital. Bank Nifty is high beta. It means that if Nifty moves x%  on any side Bank Nifty moves 2x% on the same side. Today Nifty was trading in red but Bank Nifty was up 71 points. So, Nifty corrected today inspite of Bank Nifty trading in green. This is not a good sign. A correction will come in banks also. When this happens Nifty will bleed and come back to 5900-6000 levels.

The US markets are trading in red today. Dow is down by about 80 points. Tomorrow Asian markets will react to this and Nifty might see a gap down opening of 20-30 points. Such high levels were never going to be sustainable. The macro economic situation is still weak. Whenever we think that the economy is bottoming out some macro data comes which shows that we have not hit the bottom yet. So, all those going long be cautious.

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