Markets Next Week: Sell On Rallies Is The Mantra

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The Indian markets ended the week with modest gains, following the upgradation of India's Sovereign ratings by international rating agency Moody's. It looked like the markets were heading the week with losses, after three successive days of drop, however, strong buying momentum on Thursday and Friday ensured that the Sensex and the Nifty ended the week with gains.

Markets Next Week: Sell On Rallies Is The Mantra
A drop in the price of crude also helped sentiments. Global rating agency, Moody's Investor Service upgraded India's sovereign rating to Baa2 from Baa3 and changed the outlook on the rating to stable from positive. While sentiments did turn positive on the back of the same, there are many who believe that the markets are over priced and there is some degree of caution that needs to be excercised.

How far the markets can rally from here is always difficult to predict. The right mantra would be to book profits on every rally.

Banking shares have seen a stupendous rally in the last few weeks, after the government's recapitalization drive. Most analysts are now factoring that the worst in terms of non performing assets is now behind. However, if asset quality does not improve in the coming days or if there is a delay in capital infusion, we might see a sustained decline in prices from the banking sector.

It is hence advisable to book profits in the stocks from the sector that have rallied a good bit. Here is a stock that could be a good contrarian bet on declines

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Read more about: sensex, nifty
Story first published: Saturday, November 18, 2017, 8:38 [IST]
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