The budget has been presented and the suspense over policy changes is over. The markets are now gyrating as resources are getting churned rapidly. The indices have tanked below their short term averages (13 and 30 day simple moving averages) and have made a lower top and bottom formation. The top made on March 3 of 1070 is lower than the previous top of 1075 of February 24. This is a sign of concern. The other noteworthy negative trigger is the poor traded volumes day after day. The market breadth has turned negative and the outlook is surely turning negative.
In my opinion, there are two basic reasons why the markets are not expected to rally in the immediate future. The very basis of the rally has been that the markets have invariably rallied between November and February for over 10 years after foreign institutional investors came into India and this year should not be any different. Secondly, there was expected to be a pullback rally as the markets have been falling consistently for 35 months now. I would put forth a contrarian view to the first argument of the historical aspect