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Below is the Weekly Market Quote December 09 By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets remained upbeat for yet another week and gained nearly three and a half percent. After a strong gap-up start, benchmark indices moved from strengthen to strengthen and finally settled around the week’s high.  Among the key indices, Nifty tested a new milestone of the “21,000” mark and Sensex also reached closer to the “70,000” level. The rotational buying in heavyweights across sectors helped the indices to maintain a positive tone despite overbought readings. Though the broader indices also managed to end higher in the range of 1%-2.35%, the muted action in the final sessions indicates a possible dip.

In the recent rally, we are largely trading in tandem with the US markets and the current positioning of the DowJones Industrial Average (DJIA) reaffirms our positive view. We are eyeing a gradual rise to its record high i.e. 36,952.65 levels and 35300-35700 zone to act as support in case of a dip.

We maintain our positive view on markets despite the overbought conditions and suggest participants look for buying opportunities on dips. Nifty has the potential to test the 21,200-21,500 zone and expects the index to hold the 20,300-20,550 zone in case of profit taking. Among the key sectoral indices, we reiterate our preference for banking and IT majors and suggest staying selective in the others. Besides, we are seeing early signs of exhaustion in midcap and smallcap space so maintain extra caution in stock selection

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