Markets salute the Victor
The title of this post is cheeky since there is no victor yet. Results of the general election will be announced on May 16, which means, celebration of victory is a bit premature. yet, markets certainly celebrated on Friday, May 9' when the Nifty went up 200 points (3%) and the Bank nifty went up almost 800 points which is. Whopping 6%.
So, what was going on?
Well, news is often a trigger for market movements which were
already forecast by price charts. Chart for the Nifty has Been bullish for over two months. What should a bullish market do? Well, go up! So, this market also went up because it was already in a bull run.
The same reasoning applies to the bank nifty. The bank nifty was pushing against a six year old resistance around 13000. A breakout above this resistance should take the bank index all the way to 16000. This was our view and this view was repeatedly mentioned in CNBC-TV18 shows.
Now, often markets are ready to go up and some news or anticipation of news acts as trigger. The possibility or a stable government in Delhi acted as a trigger, but the rally came about because markets wear already in an uptrend.
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