New Delhi, Jan. 4 -- Dear reader,

Happy New Year!

Last week, I wrote monthly derivatives expiry and calendar year-end could cap gains in the markets, which otherwise showed signs of optimism. Read that piece here. The Nifty managed to test new highs and is now in blue sky territory. This is the zone where the traded security is at a lifetime high, and therefore every buyer is in the money. Which means there is nearly a zero probability of distress selling by losing traders. Routine profit taking can occur, however. Traded volumes were subdued, as expected, due to the holiday season.

Public sector undertakings experienced a significant rise in their stock prices during the week. This is something I have been advocating week after week. ...