The Cycle Continues
Sentiment has improved considerably within the stock markets. And that we believe that the positive bias would continue roughly through subsequent one month, a minimum of till the budget.
Except for satiny low technical dip someday on, markets look poised for a gala time in February.
However, because the euphoria over the budget reaches a crescendo in late February, investors would be well suggested to create an exit at higher levels, we feel.
The obtain in sentiment is that the results of variety of things. Primarily the massive FII shopping for on technology counters has triggered this rally.
FIIs historically build massive investments within the starting of the year and these results in a ramp up in stock costs. Curiously, when FIIs are creating the majority of their purchases, stock costs don’t move up within the initial stages. However, costs move up sharply when the lag of a number of days and that we see a giant ramp up in costs. Take for example, the FII shopping for since the beginning of this year. FIIs are huge patrons of equity since the start of the month.
However, stock costs failed to move up for nearly 3 weeks and it had been solely last week, when FIIs had pumped in a very sensible Rs 2000 core, that purchasing started disclosure in costs. Sometimes the bullish trend that therefore starts lasts for a number of weeks and initial investor’s sellout at higher levels. This trend was visible last year too within the crucial months of January and February. The vital purpose to notice is that FIIs created terribly massive investments in equity in November and December 2009.






