The Technical Analysis says that Sensex should be trading above 12.3k by Mid March (Well I am sorry I would not be detailing how the charts suggest Sensex to be trading at 12.3k by Mid March), but the Fundamental Picture would be cleared once the US Senate passes the Stimulus Bill and US Treasury Secretary comes out with a Bank Rescue Plan (Bad Bank Plan), Well the Senate would be voting on the Plan on Tuesday 10th February while Treasury Secretary might reveal the Plan the same day, If the Senate clears the Stimulus Bill and Treasury Secretary is able to outline the Bank Rescue Plan then if the Markets are going to follow Technicals then Dow might rally above 10k in a short frame of time, which will have an effect on Emerging Markets which will pull the Sensex above 12.3K by Mid March.
But looking at how the Dow Components are Trading one can see that GM, GE, Bank of America, Citibank, JP Morgan have erased there Market Capitalization Substantially, and hence have very little weightage in the Dow, and these are the scrips which should be posting the biggest gains, maybe doubling or tripling from the current levels, to take the Dow past 10k, because Exxon Mobil, Chevron, McDonald which are the Heavy weights in the Dow are trading quite close to Resistances and cant add to much gains to the Dow.
Now Coming to the Sensex One can see that Bharti Airtel, NTPC, ONGC, Reliance, Bhel, Infosys which combined together have a weightage of close to 50% in the Sensex have resistances such that 15-18% gains for them at the max look possible, while RCOM, DLF are at new lows each time Sensex falls and may not contribute big gains for the Sensex, that lives us with Icici Bank, Relinfra, Hindalco, Tata Motors, Tata Steel, Sterlite which have erased 70-90% of there maximum values and are having combined weightage of close to 7% to add in big gains to the Sensex so that it can trade past 12.3k.
Now the Counter View
Should the Stimulus Plan be rejected by the Senate, or the Bad Bank Plan does not augur to well with the Bulls and Dow breaks past its November 2008 Lows, then the Sensex might be staring at 6k
So How to trade the Market for Maximum Gains and if ever Losses then Minimum
Well One Can buy Nifty 3100 CE for February Current Price 29 Rs in 8-10 Lots
But looking at how the Dow Components are Trading one can see that GM, GE, Bank of America, Citibank, JP Morgan have erased there Market Capitalization Substantially, and hence have very little weightage in the Dow, and these are the scrips which should be posting the biggest gains, maybe doubling or tripling from the current levels, to take the Dow past 10k, because Exxon Mobil, Chevron, McDonald which are the Heavy weights in the Dow are trading quite close to Resistances and cant add to much gains to the Dow.
Now Coming to the Sensex One can see that Bharti Airtel, NTPC, ONGC, Reliance, Bhel, Infosys which combined together have a weightage of close to 50% in the Sensex have resistances such that 15-18% gains for them at the max look possible, while RCOM, DLF are at new lows each time Sensex falls and may not contribute big gains for the Sensex, that lives us with Icici Bank, Relinfra, Hindalco, Tata Motors, Tata Steel, Sterlite which have erased 70-90% of there maximum values and are having combined weightage of close to 7% to add in big gains to the Sensex so that it can trade past 12.3k.
Now the Counter View
Should the Stimulus Plan be rejected by the Senate, or the Bad Bank Plan does not augur to well with the Bulls and Dow breaks past its November 2008 Lows, then the Sensex might be staring at 6k
So How to trade the Market for Maximum Gains and if ever Losses then Minimum
Well One Can buy Nifty 3100 CE for February Current Price 29 Rs in 8-10 Lots
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