$ 700 Billion Bail out package and impact on Sensex

The stochastics of the NIFTY turned positive on Wednesday, so in the near term (1-3 days) expect a movement that is up. 

(see the red line cutting from the bottom of the black line indicating that there could be an uptrend for 1-3 days).

The US parliament also passed the $700 billion bail out package thereby providing the relief to markets. Although the asian markets did not respond to it much, I expect the Indian markets would react to it once the markets open up on Friday. Now until and unless we have a meltdown in one of our financial institutions such as ICICI (that has been wrongly rumoured) or other such big companies, I don't think that India would be affected much by this contagion. 

The point to note here is that FII's have been taking money out of India  at a rapid pace, and the current figure for this year stands at an atonishing level of around $7 billion, and we have been feeling the pressures, but the good thing is that the Indian retail investors are putting in the monies in the market. This can lead to two scenarios 

1) FII's keep on pulling monies out of the market and the retail investors don't have any money left to put in the markets and hence the markets crash (I personally don't think that this would be the case)

2) Once the FII's stop pulling out and start putting in the monies, the markets rebound back with a vengeance (More likely)

As previously stated once we cross the 4100 level we would be in a short term uptrend, and if we cross 4250 we would be in a uptrend convincingly for the series. I dont think that blind long positions should be built but little bit of nibbling in stocks that one always wanted to buy wouldnt be such a bad idea afterall.