The Nifty closed at 5068 today after seeing fall below 5000 at one stage. The Prime Ministers remarks recently have changed the mood as also the Greek issue’s shadow on the horizon getting smaller.
What should we expect the markets to do in next month or two when the results for the 1st quarter will have a bearing. The June month review by RBI will also have given a direction. The month of July is usually bullish because the liquidity is at a high point in this month. The businesses start preparing for the busy season after July which creates demand for funds.
In the month of July 2010 the Nifty traded mostly between 5400 and 5600 and in the month of July 2011 it traded mostly between 5600 and 5800. When we consider this together with the possibility of easing of the interest rate , it is not unexpected that the Nifty may well trader between 5800 and 6000 . If this is going to be possible , the Nifty will have to go two step ahead and one step back till July.
If you recall , our advice for most of the banking stocks was to go long without paying attention to gloom in market because we judged that there was value. The Markets have had the maximum push on account of preference emerging for the banking stocks. You may check our recommendation post results for the last quarter.