Market Scenario 07/06/12

The markets had a splendid day yesterday. The markets made robust gains with all sectoral indices closing with substantial upside. Auto, capital goods, power and banking were the biggest gainers in yesterday’s session and FMCG, metal, realty and consumer durables, too, closed with significant gains.

The market breadth was positive with advances at 1146 against declines of 307 on the NSE. The top Nifty gainers were Tata Motors, Hero Motor Corp, Jindal Steel, Reliance Infra while the losers included Cipla, BPCL, Dr. Reddy.

The markets have come into a short term uptrend. Tread carefully. Watch the markets on a hourly basis and take action as per market movements.

Technical Analysis: The Sensex closed at 16454, up 434 points from its previous close, and the Nifty shut shop at 4997, up 134 points. On the higher side 5000 and 5050 are the strong resistance levels while on the lower side 4950 and 4900 are the strong support levels.

Suggested Strategy: Since the markets are on a short term uptrend, avoid short selling for the present. Ride the wave and keep booking profits at higher levels. Cautious optimism should be the watch word.