It looks like, there will be very little pf price discovery in these markets if we keep having these amplified news driven reactions like the one yesterday with ITC back at rally start levels and unlikely to be a short for anything more than 1-2 hours in an earlier edition of the markets from 2004 – 2011, yet ITC continues to be on watch for some period and will likely be nicely and squarely accumulated for the biggest move later.
Also that probably redefines Bajaj Auto and ITC both on defensive stocks for the coming decade and more. Bajaj Auto is hurting on another news driven (nigerian exports hit) bitsy yesterday and will likely rest lower for a similar binge as ITC near 2450 levels not 2250 levels when it last justified its run here.
The market’s search for tradable predilections is noteworthy however, a characteristic of the more refined trader community now on strike and rotating through sectors, trends and even old PSU heavies rather smartly given the headroom for a recovery led big up cycle till 2020.
Cadila and Glenmark are in the mix again but the recent IPO added cyclicals (Prestige, Talwalkars, Page and Just Dial) or banks are likely transparently on down and out lists for the upcoming RBI non announcement, but unlikely to hurt the broader market more than to 8300 levels .
The SBI stock is buoyant after the split listing last Thursday, meaning it is trading for a considerable headroom but institutional traders are in position for the play and longer term holding the stock is ideally an answer. Markets should let the FI yields go below 8% but for the predilection to closely track the FM still leading better economic sentiment and the credit and profitability pick up seen yet, which will eventually let the market lead the yields down below 8%