The week ahead : Getting Closer to a new high ..

The markets rallied strongly to end the week in green, compensating for two weeks losses and closing at the brink of a new possible high. Both the Sensex and the Nifty made an emphatic come back closing at 28,532 and 8810 respectively. The markets gained 2.7% for the week ended. Overall, the Sensex and the Nifty has gained more than 26% since February lows, breaking the medium term resistances.

Going ahead, one point to note is that the valuations are on a bit high levels and this could affect the on-going surge. Profit booking can lead to consolidation at the present levels, before moving forward. The markets could also react nervous if it reaches the previous peaks. So it’s not that the indices are going to surge ahead with a clean sweep. The positive factors for the markets are – good monsoon season , revised 7th pay commission leading to more purchasing power for the people , improvement in operating net profits of the companies and pick up in manufacturing activity ( according to August 2016 PMI data ).

This is a holiday shortened week since the market will be closed on Monday on account of the Ganesh Chaturthi festival. Watch out for progress of the monsoon,Nikkei India services PMI and movement of the rupee and crude Oil rates . For the week ahead , we expect a trading range of 27,800-29,000 and 8,600-8,900 for the Nifty with positive bias.

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