This week the Nifty bounced two times but still remains below 24,000 points. Last week I expected the market to be flat or declining, but it bounced up on Tuesday and Friday. I said it based on the opinions of various experts and other macro economic factors.
As per the news reports, the expectation of the ruling party to continue in Maharashtra [according to exit polls] has encouraged the retail investors to pump in money into the market. So on Friday alone, the Nifty jumped 2.39%. Further, the Nifty heavy weights like Infosys, Reliance Industries, etc., made a good jump upwards. This is also a reason that pushed the Nifty upwards.
So the Friday’s jump in Nifty can be called as a ‘dead cat bounce’, as it is not supported by fundamentals. This is not an actual rally.
So in the comming week, I expect the market to make a small bounce due to Maharashtra election results, and then either consolidate or even fall. This is because, even now the macro economic factors are not favorable which can bring back the foreign investors into India. I believe that, only with the return of FIIs, the markets could go back to its previous highs. The small bounce in the market is just my expectation. If FIIs finds it as a good opportunity to sell, then this can either make the Nifty to consolidate or fall. But later on the week it may probably be flat or consolidate.
But the over the short period, there is nothing positive for Nifty to start a bull rally. Technically, 23,200 is said as a strong support and the Nifty has bounced from there. The 24,000 is said as a strong resistance. So it very important to pick only the right stocks at the right price.