New Sensex peak? The road ahead and roadblocks in between

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Three experts express their opinion about the new Sensex peak. The road ahead is very buoyant and bullish but there are a few roadblocks, too, in between. All three agree that a 300-700 point correction is a must before the next leg up. Post correction, we can cross 12612 by December and 13000 before budget 2007.

 

With FIIs back in the Indian bull-ring (they have pumped in Rs 4774 crore in August itself - more than half of what they withdrew in May), interest rate scenario softening a bit (in fact Indonesia has gone ahead and reduced interest rates by 50 basis points to boost consumption reports Bloomberg) and crude prices cooling down to about USD 70 levels has once again given hope of a new Sensex high.

 

All three analysts Moneycontrol spoke with believe that the road ahead is quite bullish but we will have to surpass a few technical roadblocks in between.

 

The important resistance levels that immediately pop out are 12000, 12102, 12239 and once these hurdles are crossed the 30-stock bellwether BSE Sensex can scale past its previous historic closing of 12612.24 on May 10. Following which, we can see the Sensex at 13000 levels before Union Budget 2007.

 

All the three analysts, again agree that the markets have run up fast enough and a correction is long overdue. Even though, a correction has been expected since the last 600-700 point rally it is yet to come. But once it happens it will be equally sharper - like the one witnessed in May feels Ambareesh Baliga of Karvy Stock Broking.

 

Baliga feels that the retail participation witnessd during the previous rally that culminated on May 10 is missing and for any future rally to build up and sustain this important section of the markets should come back to the equity markets.

 

Investment advisor S P Tulsian believes that till October 10 the Sensex will trade in a one-thousand-point-range between 11200-12200. Post Q2 numbers markets will take a fresh direction based on Q2 earnings and overall monsoon figures that will give us a sense of India's agricultural growth and hence rural demand.

 

O all the three Sumeet Rohra of Antique Stock Broking is the most bullish and expects the Sensex to touch 13000 levels by February next year. A few roadblocks in between will only be a matter of time, as the bullish and buoyant sentiments will overcome these with ease, he adds.

 

He, too, expects a 300-400 point correction in the near-term, which is a must for the next leg of the rally is his opinion.

 

To read what Baliga, Tulsian and Rohra told Moneycontrol, Click on page 2