Stock markets have shown a rally of more than 500 points on the day of election result declaration. As it was expected that if NDA get clear majority in Lok Sabha, market will blossom. But after testing the level of 7625 ,we have seen a decent profit booking in market post new government announcement, Nifty fell from 7625 to 7159 on same day and now it is hovering around 7300. While Sensex fell around 5% from the high of 25375. Profit booking may further extend to 100-150 points but not more than that.
Strategy for upcoming trading session in Nifty Futures:
Nifty May futures in trading around 7290, we may see further correction in Nifty till the level of 7200. Traders can initiate long position only if Nifty manages to cross 7350 mark which is also a near term resistance level.
Upcoming trend of the market will majorly depend upon the fiscal and economic reforms taken by new government, further the first Budget of new government is expected by July 2014. Reserve Bank of India will announce its monetary policy review on 3rd June 2014. In its preview policy review, it kept main lending rates unchanged even after easing of consumer inflation. Overall health of the market is still strong, if the reforms by Narendra Modi's new government are in favour of the Indian economy, soon it may test the level of 8000.
By Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd