Lack of local triggers to make mkts watch for global cues

This week for markets was fully staged both in terms of earnings, two policy meetings, both of which did not do too badly and the Nifty finally closed at 5,200. The strength continues in spaces like technology and a couple of other pockets that have been lying low like autos, to an extent banks, as well began to pick up on Friday. The momentum seems intact for the broader market, which is why the Nifty Junior closed up to 4%.

On market triggers:

Trigger wise nothing left. And that is the thing about next week. We have come out of a peak newsflow season and we are going to next week with a bit of a lull. Not too many earnings next week, no policy meetings, no other great triggers which lie ahead for the market. So I think in the absence of any great local triggers, we will probably recouple ourselves with global markets much more, because that is the only overtrigger for our markets then. So every morning we will wake up, watch what the world is doing and pretty much fall in line.

The one thing to say is that there are no triggers to take us higher from here, but equally we have had a nice little uptrend, which we seem to be in the midst of and not quite done with. The question is if the uptrend has to stop and something has to peg us back what could that trigger be because without a trigger, why should this uptrend stop. They might consolidate but to breakdown we need a trigger, do we have any trigger next week, which can break the market back down and I am struggling to find any. So maybe a sideways kind of week next week looks possible, but it will depend completely I think on what global markets perform like.

On the market taking a shot at 5,400:

If unless global markets turn stale I think you have got a reasonably good shot at that. You can see that nowadays the market goes up to higher levels, clears important resistances and then pauses a bit, but every time there is a little bit of a dip that gets bought into and the market does not come back below the levels it has crossed.

During the course of the summer there is every possibility of another big leg down, we are still technically speaking talking about the intermediate uptrend. The next week just in the near-term, I think it is entirely possible that if global markets remain positive with a flattish to a positive bias you could have a good shot at that 5,400 kind of level for the Nifty.

What is even more encouraging is what you just spoke about, this week not only has the index put on 3% but many of those stocks, which have underperformed for a long time are showing the first signs of life. Praj came back this week, JP Associates moved up after a long time. You are seeing good stocks like Sun TV bounce suddenly.

I think the market probably is not done with its uptrend. Something has to break the back of this uptrend and that can only be global markets. I do not think it is inflation till Friday. So if the Dow does not break down and if it is holding very well above 13,000, then I think we have got a reasonably good shot at maybe adding another couple of 100 points to this upmove.

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