Few Simple Questions…(Deepak Singh)

Why so many people are upset with current market rally?
A. Because it does not make sense economically. [Interesting comment on Money and Markets website - Any economist fixated on so-called "signs of a recovery" needs to have his head examined]
B. The rally has come too far and too fast 
C. Most of the people could not see it coming and hence could not participate in it.
D. All of the above
I know this is a tough question to answer. But take your pick. I guess the honest answer: C.
There is another reality now…there are many people who want to participate in current move but market would not oblige as it did in the past. Today, Nifty pulled back but with big event risk ahead of us….I don’t know how many of us would have the courage to buy on declines. It’s like buying a lottery ticket and betting on one’s luck to succeed. 
Fact: The easy part of the rally is over…and now begins the tough part.
Should we brace ourself for more upside from current levels? 
A. YES, market has decent upside
B. No, market has huge downside
C. I have no idea
Again, the honest answer to the above question - C. There are three issues in making a forecast -

1. Event risk
2. No fresh Global triggers
3. Technical target almost achieved

Hence, taking a call from current levels is very difficult, and hence it would be advisable to trust your eyes more than your brain. If for any reason, Nifty moves past 3720…and sustains there expect a huge rally to 4000+.
How should we describe today’s trading action?

• Orderly pullback
• Gap filling exercise 
• Reversal

If we go by text book, today’s action looked like a pullback. It was also an attempt to fill the gap…though we need to see a meaningful bounce from 3520 to confirm that. The fact - a rally does not fizzle out on its own, it needs some triggers to terminate. Right now, the market is due for a pullback but to say that rally is over…would be premature. 

Technically, it appears Nifty is pulling back and may drift to 200 dma i.e. 3366. 
With elections blurring the horizon, a moderately sideways to down global market would be of great help to make a market forecast post event  

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