Indian Stock Markets have been touching new highs in the recent trading sessions. While market players are optimistic about the long term view about Indian markets, some of them would be cautious about near term levels for Indian stocks. Majority of blue-chip stocks are trading strong and the companies have reported surprisingly good quarterly numbers. Market participants are also expecting better results in the next quarter as the Indian government has reduced corporate taxes. In addition, proactive approach of Indian government in dealing with issues related to economy have boosted mood of trading community.

Traders are confident that the government will take quick action in order to deal with any issues related to economy. In addition, the government could also move ahead with economic reforms, which will improve long term outlook for India. A market review by Mr. Mustafa Nadeem from Epic Research follows......

A complete rejection is seen with profit booking at an all-time high which Nifty marked today. Nifty hit a record high of 12132.45 and closed below the previous close as there was some profit booking due to negative cues from European markets along with Hangseng. Markets also completed an important wave which started from the lows of August, so, it was Bears who took advantage of the resistance. There is also a divergence with bank Nifty managing to close with minor gains but ended up forming a high wave candle which is an indication of confusion.

We believe the undertone is still very much in favor of bulls given the kind of momentum we have seen in the last couple of weeks. Sectors that have contributed much to this uptrend still seem to be intact such as Auto, Financials and Metals. So we would see this move as a mere correction. There needs to be confirmation which we have been lacking and that is markets need to close above this critical zone between 12000 - 12150. This is the second retest in the last 6 months so its a test of this upmove we have seen from 10700 and that strength would have to further expand to take these levels out.

We Remain a Buyer as far as Nifty is holding 11800 on the Closing basis but with a very cautious and stock-specific approach.