Nifty over bought - Alex Mathews

The markets had opened on a positive note tracking global markets and moved in a range for sometime but very soon gained strength. In the second part of the day we saw markets moving towards a new 52 week high and closed for the day near to the day's high.

We saw buying interest in auto stocks on the back of good sales numbers in March 2010 which actually brought buying interest into the auto ancillary stocks like ANG auto, GS auto, Shivam auto, Clutch auto etc.

Metal stocks gained as metal prices were on the up on LME. Weakness was seen in IT sector stocks as rupee was firm against dollar. Strong US job data strengthened confidence of investors around the world which got reflected on markets. The US index futures indicated DOW could rise 31 points on opening.

No cues were there from the European side as they remained closed. We saw very good action in Amruthanjan, Kolte Patil, Pearl poly; Rohit Ferro etc while Syncom, Cadila Healthcare, Sambhaav, Harita Seat etc. Sugar stocks like Bajaj Hindustan, Dhampur sugar, Sakti sugar etc gained in a good manner. Finally our markets came to a close with Sensex up 1.37% and Nifty up 1.47%.

On the sectoral front, the major gainers were Realty, Oil, Auto, Bankex while the loser was IT alone. Sugar stocks and auto ancillary stocks are expected to continue its uptrend tomorrow also.

Nifty is trading at its respective 52 highs with the 14 day RSI at 71.73 and 5 day RSI at 79.4 showing an over bought situation. So investors should be cautious while trading tomorrow at higher levels.

Source : Equity Bulls

Keywords