It is a forgone conclusion that market will have a GAP open on Monday. U must have read enough on the subject over the weekend, and hence i will only add that it is the Best thing to happen for the country to have a stable Govt. However, the benefit of this event has to accrue to the Nation over the next 5 years and not necessarily in the one week or one month from the swearing in of the new Govt. Pl see my post of 15th May to get an idea about market postion after one month of the last 6 Govt coming to power.
Having said this, I will stick to the objective of this blog - that of helping the investor understand the Turning Points.
In all likelyhood the markets will race towards .382 retracement levels (from all time high and Oct 08 low) as follows:
BSE SENSEX - 13850 (Friday close 12173) and
NIFTY FUTURE - 3800 (Friday close 3684)
It would be interesting to see at what levels the markets close on Monday, as that will decide the future course of this rally. If the markets fall at the end of the day it should be treated as a big negative in a sense that it will indicate signs of Exhaustion of the current rally.
Pl remember that Dow rally is slowing down and close below 8190 will only enhance the weakness.
I will only want to caution you of not getting carried away by the media hype and postpone new buying to at least after the euphoria settles down. The .382 retracements may turn out to be a hard nut to crack. Just remember what old timers said "Sell in euphoria and buy on panicks" that way at least you don't get caught on the wrong side of the market.
So if you are long enjoy the ride on Mondya and remember that a bird (profits) in hand is worth two in the bush.
Ketan Asher.
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