Market Outlook - Next Week : Rally to continue??

We've witnessed excellent rally on the Dalal Street last week. After facing resistance for last 2 months, nifty able to cross 5180 and touched intraday high of 5197.

Bulls have geared up in fashion and trapped bears on last Thursday. Initially bulls built up fresh long position in the market with force due to which nifty climbed to 5070 from 5040 in just two minutes.There were people on the short side. They were shocked by this move but still continue to hold short position. By the time they can think of anything nifty reached to 5100 and they had to cover short position which led market to reach around 5150 levels. On Friday market opened in green following positive global cues. It burst in the last hour and touched 2009 high of 5197, after remaining quite for the day.

Now what next?
There are few reason for me to continue long position in the market and I'm bit optimistic that nifty will move towards 5380 - 5450.

- Christmas rally is underway now and it's likely to continue for while.
- Markets have touched new highs after consolidating for almost 2 months. This could lead markets to add 3-4% rally as traders would become active now.
- Lots of People/Funds/HNI are sitting on cash and market is not giving them chance for entry. This money will come into action once nifty closes above 5200.
- Earning season will set tone for the market in January.
- Fresh allocation for the equity will take place in January for many FII and Funds.
- This Christmas party is likely to continue till mid of January unless there's some brutal correction globally.
- There's ample liquidity in the system which is keep on flooding into the stock market. So even if stocks look pretty expensive at this point but this liquidity could take stocks such high which no one has anticipated.

My Recommendation:
- This up move should take nifty around 5380-5450 levels.
- Traders should hold long position if they've taken it already.
- Fresh long position should be taken only if nifty closes above 5200.
- Investors should hold there position and partially book profit around nifty levels of 5380.

Happy Investing!!