Strong markets: Should one continue to buy?

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Strong markets: Should one continue to buy?

Dalal Street put up a strong performance ahead of the important event for global markets - the QE2 announcement in the US . The Nifty gained 41 points to close at 6,160 and the Sensex shut shop at 20,466 up 120 points.

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Dalal Street put up a strong performance ahead of the important event for  global markets - the QE2 announcement in the US . The Nifty gained 41 points to close at 6,160 and the Sensex shut shop at 20,466 up 120 points.

The broader markets followed the path of the frontlines indices. The midcap index put on about half a percent.

Gaurav Doshi, Vice President, Equity Specialist, Morgan Stanley Private Wealth Management says that markets might retrace to the midpoint levels to give a good buying opportunity but taking a broader perspective he is positive and expects the trend to continue.

"What one needs to focus on is that our markets are moving in a staircase pattern. We have a range of about 18,000-20,000, which has got reset to about 19,000-21,000, we think the midpoint lies around 19,500 mark," he explains.

Doshi thinks that the market could whiplash either  way over the next four-five trading sessions but the markets could pull higher but eventually tread back or retrace a little lower, consolidate a bit more before continuing to climb higher.

According to Technical Analyst Vijay Bhambwani 6284 which was the previous high sees to be a very formidable hurdle for the bulls to overcome. Bhambwani adds that after mahurat the markets do historically tend to slip a little. "As along as those levels remain 6357 which was in erstwhile all time high will basically be beyond reach in the coming two to three trading sessions," Bhambwani elaborates.

Agrees TS Harihar Of ICICI Securities that the markets are poised to go much higher. "Possibly a week, 10 days it may consolidate but I think that trend seems to be on the upside," Harihar adds. According to Harihar, the markets may hit 6600 by end of December else it will be in the range of 5800 - 5900.

However Doshi is not so positive on the quantative easing expected by Fed tonight. "There is a slight stress, a strong possibility that things may not just go as we think they will," Doshi points out.

Doshi is betting on Jyoti Structure , BGR Energy , Alstom and Crompton Greaves .

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