Consolidation

Dear Investors,

Markets opened on good note in early morning to reach 6881 Nifty levels and Sensex at 20651, but gave away all the gains and ultimately ended the day in Negative territory with Nifty at 6146 and Sensex at 20498.

Nifty tested the R1 given for the day (Read the blog for 4^th Jan.11) and Closed at S1 given for the day (Read the blog for 4^th Jan. 11).

Market is not in a hurry to run away towards 6220, which is next important resistance level. This looks likely to be healthy sign for the long-term health of ‘Bulls’The on going consolidation will continue for few trading sessions which will allow Mid Caps to catch up with large caps.

As it was mentioned in Monday’s (3^rd Jan.) article, market has consolidated in phases

And moved in upward direction. This is the sign of a ‘Bull Market’

4667  to 5330

5330  to 5690

5690  to 6090

Now the range for consolidation before taking out the top looks likes to be…..

6090 to 6220

Technicals:

Pivot for nifty is:  6150

R1 (First resistance) is @ 6176

R2 (Second resistance) is @ 6207

R3 (Third resistance) is @ 6233

R3 Level should be used to book profits for the longs created at S3 (Given below) Levels of 6063

NOTE

This can be treated as channel of consolidation for short term as well as positional traders.

S1 (First support) is @ 6119

S2 (Second support) is @ 6093

S3 (Third support) is @ 6062

NOTE

Long term ‘Investors’ can carry their investment holdings up to the level of 5690, which was the start of previous consolidation phase.

FOR SENSEX FOLLOWERS:

Pivot is @ 2053

R1 is @ 20616

R2 is @ 20734

R3 is @ 20818

S1 is @ 20414

S2 is @ 20330

S3 is @ 20212

So watch for the levels and take positions accordingly. Rest of the things are not changed from last few trading sessions.

It looks like ………..

BANKS

AUTOS

And

REAL ESTATE COS. ARE GETTING OUT OF TRADER’S BOOKS.

So at every high level lighten your positions in these sectors and try to move in

other sectors.

Watch for…….

FMCG

IT

PHARMA and

NBFC (Non Banking Financials)

Till next up move begins

STOCK SPECIFIC;

TISCO (Target 740)

STERLITE (Target 212)

HINDALCO (Target 265)

SESAGOA (Target 342)

RIL (Target 1130)

Watch for

Infinite Computers (As investment buy)

EMCO (Investment buy)

Ramkey Infra (Investment buy)

Amrutanjan(Investment buy)

Elecon Eng. (Investment buy)

Federal Mugal (Momebtum buy)

Bata (Momentum buy)

Usha Martin Education (Momentum buy)

Sujana Towers) Long-term investment and momentum buy)

ADOR FONTEC (It was advised few days back, read the Blogs)

Has given a fresh Break out and will give good returns in short as well as medium term

Period

ITC (A good investment buy)

Technicals suggests

a) That ITC is coming out of long consolidation phase (post bonus)

Of 156 to 184 (3edAug 10 to 4^th Jan. 11)

b) It has completed 68.8% retracement at 161.8

c) It is closing above 200 DMA at 155 for last few weeks

So also 30 DMA at 170, 50 DMA at 171, 150 DMA at 163

Indicating that it may take off at any moment to cross the previous top to move towards 203 levels and above

Watch the levels to enter at lower levels either for trading purposes or long term investments.

THINK! JUST DO NOT READ!!!

Thanks

Dr. Vasant Bele

Disclaimer: views expressed are mine, take your own investment decisions.