Market Outlook 21st-25th October

Oct 18, 2013 No Comments by

The markets rejoiced the resolve of the debt ceiling with Nifty ending just a bit shy of 6200 levels. The US government has got a short term breather for the debt ceiling till 15th Jan but no permanent solution. As of now this crisis seems to be over.

The next big event is the RBI policy which is on Oct 27. RBI has made it very clear that controlling inflation is its first agenda. It firmed this with a surprise repo rate hike. This month also the inflation number don’t point to any slowdown. So, the RBI may surprise with a repo or CRR hike.

The result season has surprised everyone. Most of the big weights like Infy, Reliance, TCS etc have posted better than expected results. This has taken Nifty to astronomically high levels.

A correction is very likely in near future. This correction does not need any negative news flow. Many times corrections at such high levels happen on back of profit booking. In my last article also i said that this is not the right time to enter the market and i still want to say the same. But its also not the right time to enter the market. Let the market top out. Once signs of weakness is seen we can initiate new shorts. Many analysts say that the rally will continue but its law of nature that whatever goes up has to come down. Nifty is entering uncharted territory now. So, we don’t know whether it will turn back after 50 points,100 points or 200 points. But we know for sure that it will turn back.

So, the best strategy is to wait for this rally to fizzle out. The wave has passed and there is no point trying to ride a passed wave. Have patience and wait for the next opportunity.

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