Expect Nifty to test 5350 soon

In the last month we have not pierced this level and traded above that, but we are within knocking distance of that. We should be getting to 5,350 sometime soon. It has been a large cap rally today. Midcaps have done okay, but the leadership is from large cap names within the index.

Global markets have also been okay. The European markets are off the highs of the day. It looks like money is still coming in and index stocks are still continuing to rise to recent highs. It is good going for our markets and 5350 has come sooner than what one would have thought.

Last Friday, all of us feared that the market will go down to 5,050-5,100. But with that weekend rally everything turned around and we are back at the 5,350 level. This was the target for this move in any case when the market moved out of 5,200 zone.

I don’t know whether this level has any significance in terms of resistance and whether the market will respect that or we are straightaway headed to 5,400 kind of levels and then we’ll see if global events or liquidity will permit us to climb even higher levels. Right now, there is a sense of momentum in the market and there is no question about that.

The bulls have had the upper hand this week. There is strong leadership to this move. The last couple of moves which had taken the market to 5,200-5,250 were quite patchy and a whole host of high beta stocks were leading.

But over the last few days you have seen some really high quality stocks like Reliance, IDFC, Tata Motors and private banks. They are leading and this is not a midcap led rally. It looks like money is flowing around and large caps have taken the leadership mantle this time.