Nifty breaks 4700; 5K closer to reality now, say experts

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it was a surprise turn for the markets on Friday. Trade started off with much uncertainty but went on to spurt ahead later in the day. The markets continued to extend their gains and closed at fresh 2009 highs. Positive global cues and strong buying interest helped the markets extend their winning streak to seven straight sessions. It was the large-caps that proved to anchor the market taking it past 4700 and more importantly, keeping it there. Now that 4,700 has been broken, is 5,000 a distant dream? Hitendra Vasudeo, stockmechanics.com says that the breakout point was placed at 4,735 and we have crossed it. Today, if we can close above 4,735 then expect a rally towards 5,000 at least and to an outer extent to 5,250. He adds the one should maintain overall long positions with a stop loss of 4,600, below which, the downside momentum will resume. Prakash Gaba, Technical Analyst too endorses a similar view saying that the Nifty could cross 5,000. "A close above 4,789 can take it to 5,154 levels." Similarly, on the Sensex, he feels that 16,046 is a strong support level and close above 17,249 will rally the markets further. Gaba says that the Indian markets have formed a base. The rally was strong. It consolidated in the narrow band and now the rally will get even stronger. The S&P 500 is showing a classical reversal pattern. Jitters in the Chinese markets will not impact the Indian markets. Reliance Industries can touch Rs 2,200 in the near term. If the rally continues it can also go up to Rs 2,400-2,600. He maintains target of Rs 885 and Rs 2,000 on ICICI Bank and SBI, respectively. He is bullish on the mid-cap and small-cap space and one could fetch 30-40% return in the near term. Pashupathi Advani, Advani OTC Dealers believes September would be an interesting month and sees the Nifty hitting the 5,000-mark. However, he does fear that rainfall would play havoc with the market sentiment. However, Ashwani Gujral, Technical Analyst does not share the optimism and says that the breakout may not last. He feels thatChina is trading at four-month lows and finally all markets follow each other. “The markets may get into a bigger correction so this breakout needs to be sold into or at least profits should be booked here.” Sensex to cross 21K? Nishid Shah, President and CIO, IDFC Investment Advisors says the current rally is liquidity driven but sees the likelihood of the markets seeing new highs in 2010, given better corporate earnings. “My sense is that as market gets comfort on the next year’s number then that will be the time when we will see the market probably crossing 21,000.” Shah added that insurance companies were sitting on huge amounts of cash to the tune of USD 15-17 billion, which, he said will be invested by March 2010. “Whenever the domestics have turned bullish and been buying the equities, they have bought midcaps. So, I think that is the space where we are going to see massive action over the next six-nine months.”