"And The Winner Is .........."

Dear Investors

Nifty is looking volatile and moving under the range of 5750-5640 for last few trading sessions.

Markets after opening with a small gap down position at 5656 rallied to high of5729 levels as a response to some good corporate results but could not sustain that on the background of weak global cues and profit booking at higher levels. Nifty after testing lower levels of5634   closed the session at some what better level of 5711

What Next

Market movements for last days indicate that both ‘Bulls and Bears ‘fatigued and are waiting for final

Count down, Nifty on 20 Jan. nearly tested the R1 (5738) and bounced back from close of S1(5653)

Nifty closing above 5700 at 5711 is the only sign of hope for the bulls otherwise all the clues are against bulls to resume the upward trend. Close below R1(5738) along with bad Global situation like, Bearish closing of Asian Markets,( Hang Sang ,Nikkie, Kospi,and Shanghai all down),

 Fears of China raising the rates, RBI’s stance, Rising Inflation, Nearing of expiry all these things are creating ‘Flutters in the hearts of ‘Bulls’ Even bears are not sure about the developments as Nifty is reputedly taking support at 200 DMA and(5610) and bouncing back( though weakly).So the situation is that of ‘Suspended Animation’, Investors and traders are not able to judge’, Who will Be The Winner’

In such situations it is better to be away from markets or have day to day small positions with stop loss in place. I investment buying is not advisable at these levels. To me, from Fundamental Macro and Micro Situation, Technical indicators and Geo political situation, looks like markets are waiting to ‘Break Down’ to a fresh lower range 5380-5540. The only hope for upper break out is ‘RBII keeping status co’ on rate front and ‘Inflation’ starlets declining. and few positives like $ index getting low, Crude not increasing, and some good results in Indian corporate, but all these are weak signals. All this is keeping every one guessing the out come of this ‘Big Bull and Bear Fight’ ,so   till you get some signs of ‘The Winner’ of the battle It is advisable to  ‘Create Cash’ by booking profits at higher levels, to use that in ‘Final Crash’

Technical View

PIVOT FOR NIFTY:  5691

R1 (First resistance) is @ 5748

R2 (Second resistance) is @5786

R3 (Third resistance) is @ 5843

R1 is acting as a strong resistance for any up move, so it should be used to book profits or cut down shorts it it is crossed.

Any close above R3 should be used to create fresh Longs till 5960

S1 ( First support ) is @ 5653

S3 (Second support) is @5596

S3 (Third support) is @ 5558


Significance

Nifty is bouncing back from S1 to test R1 levels . Longs should be created at S1 and covered at R1

Any close around or below S3 should be used to go long . IIf S3 is broken on closing basis with volumes one can go aggressively ‘Short’

DMAs (DAYS MOVING AVERAGES)

5DMA@5687
20DMA@5910
50DMA@5937
200DMA@5613


Significance

At present the range is 5613 To 5687/ 5700. It will take some extra ordinary thing to happen for Nifty

To go nearer to 50DMA, If it the one can consider going Long., till that time trend is ‘Negative’

VXI (Volatility index)


On 20th jan. VXI was @ High 21.77, Low 20.06,Close 21.01
For today VXI Pivot is at 20.94


Significance

Since last few trading sessions there is ‘Reduced Volatility in VXI’ indicating no participation of both ‘Bulls And Bears’ , this is keeping markets in a Tight Range’

  Conclusion

‘WINNER IS NOT PREDICTABLE’ but last few round are in favor of ‘Bears’ so keep positions minimal and cash plenty. No celebrations till the ‘Fight’ are over. It may be ‘Budget’ by Indian government, or RBI policy, or ‘China’ and ‘Europe’ situation to have a conclusive impact. All these are ‘Judges ‘of fight

Stock Specific

IT IS NOT ADVIISEBLE TO TAKE ANY POSITIONS AT PRESENT, EVEN IN INDIVIDUAL STOCKS, SO NO RECCOMENDATIONS

WAIT and WATCH IS THE BEST POLICY WHEN YOU ARE NOT SURE OF THE RESULT

Thanks

Dr.Vasant Bele

All the views are personal; Take your decisions after consulting your expert