Markets in 2010

Tenzin Says:

Hello sir,
I hope your net connection is fine.. so whats your take on year 2010??? What can we expect? I have heard rumors that 2010 will see the markets going to all time highs....

Hi Tenzin, first I am glad that you are reading my blog even though I am not so regularly updating now a days!

Second is my internet connection working fine.

And third is Markets in 2010!!!

That's very easy & very difficult. And also how u r looking at it; fundamentally or technically!

Its very easy because of reasons like, if economic recovery sustains & continues northward direction then there is no 2nd thought that BRICs (Brazil, Russia, India & China) are bound to do well comparatively others.

And its very difficult because of fear of double dip recession possibility, exit policies in monetary & fiscal policies.

Anyway coming out of all these fundamentals, we now look at into my favorite part TECHNICAL ANALYSIS.


Now above chart is perfect example "REVERSE/INVERSE HEAD & SHOULDER"

As of today, Nifty is facing 5290/5300 as major resistance and which is also neckline in above graph. In March 2008 Nifty started coming down due to whole lot of mess in financial markets in US!

But I am sure we are going cross that psychological barrier of 5300 within 2-3 sessions. And there earning seasons also coming in couple of days. But I feel after/during this earnings session market may see some profit booking which may take market to 5180/5150 levels. That is the time, medium & long term investors should starting acquiring some mid cap stocks. Here I am particular about mid cap stock because during recovery mid cap stocks move multiple times of index due to high beta & large fall during market crash.

So coming to question whether markets can test/breach the previous highs? That's going to happen definitely but I feel its not going to happen in a straight or exponential way. Since if you observe from 4300 levels itself for every 200-250 up move will see a small profit booking. And particularly traders should be aware of their exit strategies always because major jerk/double dip recession/exit of green shots may take nifty to 4700 levels.

Bottom line:

So my advise is always look for an opportunity in mid cap & small cap stocks which can become large cap in coming days!!!