The start of 2011 hasn’t been great for Indian markets, but lately there are some signs of a reversal in that trend. The key question is whether the current upswing will sustain?
We may see some consolidation in the run up to the Budget and the main indices may remain in a sideways pattern. Unless there is follow-up buying by big players (read institutions), the current rally may run out of gas after a while.
At the same time, any fresh downside will be limited as earnings growth has been good if not spectacular. Overall, the India growth story is not under any major threat. The Government appears to be taking a few right steps in a bid to shore up UPA II’s sagging image. Globally too, things seem to be settling down.
So, medium- to long-term investors must utilise any further dips to snap up quality names. Traders should remain a little cautious as volatility is here to stay.
The Nifty is expected to trade in the range of 5380-5450, before hitting 5600. The broad range could be between 5300 and 5600. Watch out for the 200-DMA level of 5630.
