InvestorQ : Can you tell me your market view for the 06 of January 2021? After such a strong bull rally, can the upside still sustain?
Dia Deshpande made post

Can you tell me your market view for the 06 of January 2021? After such a strong bull rally, can the upside still sustain?

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diksha shah answered.
7 months ago
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You are right that this bull rally has really baffled most people. In fact, the pace of the rally has been consistent and has been gathering momentum since the last 10 trading sessions. Nifty got closer to 14,200, the Sensex moved decisively past the 48,400 mark and FPIs are showing no signs of relenting. The first risk I now see is at Sensex 50,000.

On Tuesday, the sentimental dampener was that UK did announce a comprehensive lockdown. However, markets appear to have taken that in the stride and had limited impact on the Indian markets as it bounced back on strong IT sector expectations. Actually, even the UK and EU markets appear to have taken the news lightly as even UK was up.

Foreign portfolio investors or FPIs were net buyers in the equity market to the tune of Rs.986 crore while DFIs sold Rs.490 crore on Tuesday, 05 January. The momentum of November and December as of now is continuing in January as FPI flows continue. For now it looks like the risk-on game is in full flow.

In terms of global market cues, the Dow and the NASDAQ were higher on expectations that the Georgia election could give a total majority to the Democrats in the Senate. If the 2 seats in Georgia go to the Democrats, it would be a tie with the decisive vote with Kamala Harris. Europe appeared slightly uncertain but SGX Nifty is flat to positive.

To sum it up, I think the first major bottleneck for the Sensex could only come around 50,000 which is a major psychological barrier that experts have been talking about for a long time. That is less than 4% away so it is not something to get really stressed about. Your focus should now be on the Q3 results which will start in first week of January.
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