Nifty eyes @ 22000, amid red sea tention

Market to remain volatile, correction is due

POSTED BY NILESH WAGHELA

MUMBAI: The stock market has continued to advance defying the forecasts of experts and at the same time midcap and smallcap stocks are rallying despite high valuations amid experts' warnings. 

Looking at the economic data and global trends, there is currently no visible trigger to break the boom.  In a nutshell, Nifty is eyeing the shores of 22,000 with Rata Samudna red alert.  Given the bullishness and high valuations, it seems that the benchmark is likely to cross the  22,000 level easily.

But if the market finds any trigger, a quick and sharp crash is also possible . It is also likely that midcap and small cap will see a faster and more severe crash.  

According to technical experts, the immediate support level for Nifty is 21,800 to 21,900 and if Nifty sustains above 21,800 then it may rise to 22,000 and 22,200.

 Looking at the fundamentals, crude oil prices rose during the week, with FIIs becoming net sellers and DIIs net buyers on a regional basis.  

FII registered net buying of Rs.  3293.23 crores, during last week, while Domestic Institutional Investors (DIIs)'s net sell recorded at Rs.  7296.50 cr.  

The market will also keep an eye on the CPI inflation data to be released on January 12.

Analysts believe that investors should take a cautious approach with an eye on the seasonality of corporate results and continued uncertainty in the night sea. 

 Global trade will continue to be disrupted as global giant shipping companies continue route diversions as Houthi militants continue to attack commercial ships like pirates in the Red Sea.