The towering rally continues for our market and if we compare percentage move from last SAMVAT, our markets have taken a giant stride forward. This Diwali, the Nifty has managed to clock fresh record highs beyond the new milestone of 10200; courtesy to vshaped recovery in last three weeks. But, the real question lies whether the same optimism is going to continue or not.
With a broader view certainly 'Yes'; the 'Bull Run' is likely to continue, but if we have to consider slightly smaller picture then we are still a bit sceptical about it. We continue to believe that the market needs to have some kind of breather to maintain the higher degree sturdy structure. It sounds a bit contrarian as one would always have a counter argument saying we are at record highs and there is no negative development around us. Technically speaking, if we closely observe price movement since the beginning of August, the index has done nothing. We have already witnessed a couple of price shocks after hitting record highs on previous two occasions and the index is more or less back to same levels. There has been a series of divergences in weekly 'RSI-Smoothened' and considering its historical performance; we certainly do not want to neglect it.
For the coming week, in case of an extended move, we may see Nifty heading towards 10250 - 10310. On the flipside, 10175 - 10100 would be seen as immediate support levels. Going ahead, we continue to advise remaining light on positions and adopting stock centric approach with a proper exit strategy. This is certainly not a kind of market where you should go long all guns blazing.