The NSE 20-Share Index is defying analyst forecasts by rising in the run-up to a general election. In addition, it is defying the popular mantra that in the wake of the holiday spending that is the Christmas holidays, January leaves individuals with little disposable income therefore the stock market has to fall as these individuals sell their shares for school fees etc. None of these arguments hold water. They are the basis of the maxim "market action making market commentary".
Over the past 19 years, the NSE has attempted to breach the 5000 - 6000 level on the Index three times. The first was in 1994 with the monthly close at 5030. The second was in 2007 with the monthly close at 5774. We are in the midst of the third attempt. It usually takes the fourth attempt to clear a significant resistance level. The Index needs to close above 5947 for atleast two months to signal a break-out to new highs.
On a cyclical basis, the dates to watch are 23rd of June, 2013 and 30th of December, 2014.
"The NSE-20 Share Index surged to just 25 points shy of 4,500 points, boosted mainly by increases in prices of blue chip counters.
The last time that the index touched this psychological level was in January 2011.
Beer maker EABL was the day’s top mover, accounting for 41 per cent of Tuesday’s turnover with foreign investors taking up 98 per cent of the stock on sale...."
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