New Delhi: Markets are likely to open slightly weak on Monday but the bullish undertone will prevail through the week, feel experts adding that the support level for the same lies in the range of 10,753-10,850.
Experts feel that a correction will be healthy for the markets because money waiting on the sidelines will then come in. The money accumulated in the recent NFOs offered by most of the mutual funds is likely to come in when the correction happens, they say.
Next week to see bouts of deep and sharp correction, but bullish undertone to prevail
Gaurang Shah, Geojit Financial Services
The kind of correction that was expected was seen in today's closing hours. Market might open slightly weak on Monday. That will be a healthy sign because people are waiting for a correction and this will bring in the new money. All the collection which was done in the recent NFOs offered by most of the mutual funds might find its way into the market when the correction happens and can happen even on Monday. Markets might open on a weak note but the money will come in and buying will support the correction on the down side. Through the week the bullish undertone will be there. But there might be bouts of correction, which would be very deep and sharp.
People are talking about 11,500-11,750 levels but what remains to be seen is whether we cross this 11,000 in the coming week and if we do then whether we will be able to sustain above this mark. On the Sensex I would be looking at 11,000 on the upper side and whether it is sustainable above that and on the downside maybe 10,825-10,850 would be the support level.
Worried about the negative breadth of the market
I am worried about the breadth of the market, which is negative. Going forward the market breadth has to be positive, which was not seen on Friday.
To witness little bit of correction; support at 10,750 levels
Sandeep Wagle, Technical analyst
There will be little bit of correction but over the weekend, markets will be bullish. Looking at the trend the opening on Monday should be positive. We are looking at 11,400 levels. Maybe there will be a correction before the target is achieved or the target could be achieved without the market correcting. The correction can come in two weeks also. Resistance is at 11,400 and support at 10,750 levels. If that is broken then one can see 10,650-10,670 levels.
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Nifty likely to touch 3400 levels in the medium term
Sachin Chavan, Technical Analyst
I expect cautious bullishness to prevail next week. In the medium term the Nifty is likely to touch 3400 levels. But next week we could see a guarded movement.
For Nifty, the immediate resistance is at 3270. Beyond that the next resistance is at 3400, which is also the medium term target for the Nifty. The major support lies at 3070.
Market looks a little stretched now; 5% correction from the current levels should be taken in stride
Sumeet Rohra, Antique Stock Broking
Market is showing some fatigue especially at higher levels. Market is seeing some fatigue around 10,900 levels if one looks at the trading pattern of the last 4-5 days. The market looks a little stretched now. For the past few days profit booking has set in after 2:00 pm indicating that the markets look tired.
Though it is very difficult to talk about resistances in such bullish markets, 10, 900 would remain a resistance on the upside and a very strong support, which the market will find very difficult to breach. A 5% correction from the current levels should be taken in stride. Only if the market breaches 10, 377 then there should be a cause for concern.
In the very short-term 10,753 is a very good support for the markets next week. If it violates that then one could see some sort of mild profit booking setting in.
Shankar Sharma, First Global
Mkt has become concentrated; Midcaps will continue to struggle
The market has become concentrated since the beginning of the January rally. Therefore this week one saw midcaps struggle and large caps do well, which has been the case for the last six months. Those themes have still not run the course. Midcaps will continue to struggle going forward.
Large cap segment to benefit from MFs’ investments
Reliance Mutual Fund made a statement that they would be focussing on 100-140 stocks in order to deploy Rs 5500 odd crore. This is a sign that all that money is going to come into the mainline large cap companies. Because to absorb large flows you need large companies, which reinforces the basic theory that it is the large cap segment, which is going to be the prime beneficiary of these inflows that the mutual funds are seeing.
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Large caps to outperform the markets
We still think it is okay to be invested in large caps but not so much in midcaps. There are a few good midcap stories there and so are some bad large caps stories. But by and large as a size strategy, large caps will continue to outperform the markets.
Andrew Holland, DSP Merrill Lynch
No concerns about valuations
We are not concerned over the long-term sustainability of emerging markets and obviously, India is the fastest growing. So in short term we might see liquidity dry up like we saw in October and it will have a short-term impact on the market. But analysts are saying that one should buy on these dips. So we are not concerned at the moment on these valuations.
More of local money to flood market
We are going to see more of local money being raised. Last year we saw about $3 billion being put through mutual funds by retail investors. That amount is already there this year. So our current forecast that USD 6 billion of retail money is coming through mutual fund this year, is probably conservative.
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