Indian equities have stopped trading for the rest of the day and created a new historic Monday as the benchmarks have hit two consecutive upper circuits. The Sensex has frozen by hitting 17% upper limit for the first time and recorded its best start ever on hopes of a stable government at the Centre following the UPA’s win. The benchmark Sensex ended the day up a whopping 2,099 points (17.2%) whereas the Nifty closed the day with gains of 636 points (up 17.3%). The BSE Mid Cap and Small Cap indices surged 12% and 9% respectively. While all the sector stocks had a field day, gains in banking and realty sectors really stood out. The Nifty has cleared the triple top around 3720, which means the market is in third leg up. The monthly momentum cycle has turned positive, which indicates that from here even if we witness a correction,the probability of that getting deeper is very less. Also on the weekly charts the Nifty has violated the weekly averages, ie 20-WSMA and 40-WEMA. Bulls with 578 advances and six declines dominated market breadth.
Our both short- and mid-term biases are up for the target of 4550 with reversal placed at 3950 for the short term and 3700 for the medium term.