Bulls continue to rule the street. Nifty re-conquered the
11850 level. The Nifty came within kissing distance of 11900 mark. The
Sensex and Nifty have risen 1080 points and 300 points, respectively in last
four sessions. The Sensex rose 269 points to 40055, Nifty rose 97 points to 11883
in trade today. The Sensex had crossed the 40K level last on July 5 (Budget Day)
when the index hit an intraday high of 40032. The Sensex and Nifty extended gains
for the second straight session today on prospects of the government reviewing
existing structure of Long Term Capital Gains tax, Securities
Transaction Tax and Dividend Distribution Tax . The Sensex and Nifty have
risen 1,080 points and 300 points in the last four sessions. However, the
indices have seen major gains in the last two sessions amid a report that the
government was reviewing tax structures for market transactions. As
government is taking steps for revival amid slowdown in the economy, investors
expect more reforms which is pushing indices up. In its first major step to
provide fiscal stimulus to pull the economy out of economic slowdown, the
government cut corporate tax rate for domestic firms and new domestic
manufacturing companies on September 20. Corporate tax rate was brought down to
22% from 30%. For new manufacturing companies, the existing tax was reduced to
15% from rate 25%.
It seems that tug of war
between bulls and bears would continue for next few days to get a fresh leg of
the rally. The trend of the market is intact to positive but if it sustains
below 11800 then only a profit booking could be seen towards 11750-11700 zones
while on the upside a decisive move above 11875 could commence the next leg of
the rally towards 11925 then 11850 marks. We could not see Thursday’s session
as a sign of trend reversal. The index needs to stay above the 11850 level
before it sees any bounce towards the 11950 level.
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Resistance: 11900, 11950, 12000
Support: 11800, 11750, 11700
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