Anil Manghnani, Modern Shares, Stock Brokers has expressed hi8s views on going bullishness in stock market and his views on the subject are as appended below:
I think after long time, almost 15-16 months, we have had that channel just about closed above yesterday, so it will be interesting to see what it does over the next two days. Yes there was a little bit of volatility yesterday, but you need to see more of it to actually call a top. My gut feeling is this market is playing out very similarly to what happened between '92 and '96. We had two tops in '92- 94 and then a collapse in '95. We have had this similar situation in 2008 and 2010 with the tops and 2011 was a complete down; you started the year at high and closed at the low. Interestingly, if you go back to '96 February, you had a sharp move which is very similar to what we had in January this year, and then about 50% correction. So if I equate similarities between '96 and today, I would say the Nifty will give you at least a 50% correction of the recent moves somewhere between 5,300 and 5,400. So 4,500 right up to 5,400 is a 900 point move, so about 450 point correction is on the cards, so somewhere back to 5,049-5,050. But having said that, most of the stocks in the index and midcaps are now little stretched; they have all reached at 200 day moving averages. Since the 50 day in most cases are still well below the 200 day, then I would say they are ready or ripe for a correction. So look out for a top somewhere in the next 100 points on the Nifty and then expect at least a 50% correction of the recent move both in the index and across stocks.
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