Sentiment turns positive

Deepak Singh Tanwar

Crisis always brings opportunity. That’s what has happened last week. Growing fears of war between India and Pakistan created panic selling in the previous week. By the time tension reached its peak, the market had fully factored in the impact, and prices stopped falling.

And it was a good way to welcome the New Year. In the first week of the year, the index recorded a gain of 203 points. The move was of nearly 400 points from the low of 3100 points. Software, cement, and a few old economy counters were the star performers.

The rally witnessed last week confirms the fact that market is in for a positive move, and the medium-term outlook is likely to remain positive. While a minor profit-booking in the first half of the week is not ruled out, the position will continue to show improvement, and players who take position with a medium-term view, will have a reason to cheer. The level of 3100 points should be considered the rock bottom, and a long position should be held on to unless this level is broken.

For index, participation from counters like HLL, Reliance, ITC, Infosys, and Dr Reddy’s Labs may become very crucial, and these counters could be the driving force. Reliance, which showed a smart move last week, is likely to continue the northbound journey. ITC, Bhel, Telco, Tisco and HLL may also sustain buying interest.

For the IT sector too, the outlook is positive. Long position can be taken at every decline. Counters like Digital Global, Polaris, Infosys and Wipro may remain the outperfomers. As the undertone is positive, and the main direction is up, avoid the temptation to short sell.