DAMAGED SENTIMENT

Dear INVESTORS

11^th Jan. 11 was the day of great 'volatility' on stock markets. Market started with a flat opening, without any losses to the prior closing. No body new that it was a ‘Lull before storm’. After gaining few points on Nifty, market suddenly changed it course and started drifting down and continued its journey to the crucial support level of 5690,it stopped  JUST SHORT OF IT, AT 5698. In last half an hour again it changed its direction and covered the losses of the day, to close without any major gain or loss. Nifty tested the level of R1 (11^th Jan Blog) at 5866 (5842) as well as the S1 (11 th Jan blog) at 5699 (5698) and closed at 5754 level

During all this volatility ‘the marked’ thing was, fall in large caps like, ACC, RIL, INFOSYS, ICICI BANK, HDFC BANK,SBI, the so called ‘Pillars’ of market, indicating a ‘Structural’ damage to the market, It has caused ‘ Sentimental ‘ damage to the investor and trader fraternity, leading to surrendering their market  positions in panic.. Though markets recovered at the end, it looks that investors are ‘shaken’  by the way in which market behaved in all the trading session on 11^th Jan 2011.

WHAT NEXT?

Is 'The’ question in investors mind and answer is not known to any one,

Nifty has to stop at 5690 so as to get ‘investor sentiment’ back, any breach of 5690 will lead to one more panic in markets, which may change the LONG  TERM TREND to  negative. For grieved traders and investors delight Nifty has to move up to 5820/5888 levels so as to keep their hopes alive. One thing is certain,  market is not going to ‘Run in Hurry’ towards up side. It will take lot of ‘efforts and will’ of the ‘Bulls’ to  change market direction to ‘Up trend’. Till that time keep  watch  on 'the range 5690- 5880/5960', beyond which there is no visibility, at least in near future

 Even ‘Compulsive traders’ should refrain from creating big positions in markets

‘Either long or short’

All traders and investors are advised not to take big positions on any side unless there is emergence of definitive trend. 'Trading bounces' to 5880/5960 should be used to book profits or cut losses and become neutral.

Levels below 5690 are an indication of ‘Bears’ getting upper hand in market. One should watch for 5543 to confirm the ‘Negative’ change

6003 on closing basis can give some indication of recovering the lost ground and 6615 WILL BE CONFIRMING THE CONTINUATION OF'UPTREND'. So watch the levels before you leave 'The Ground'

Till market gets settled in 'volatility' it is better to remain away from the screen, even 'compulsive traders' should remain away. Get your unfinished jobs completed or take holidays for few days and enjoy the Cold’ in warmth of ‘Earned Profits ‘during last few months. While losers should remain satisfied in cutting further losses

TECHNICAL VIEW

 BULLS WATCH FOR

 5690/ 5543 AS SUPPORTS

 5880/5960 /6003 FOR RESISTANCE   

BEARS SHOULD WATCH FOR

5880/6003/6115 AS RESISTANCE

5620/5543 AS LEVELS TO CREATE AND MAINTAIN SHORTS        

No stock specific recommendations for the day

PROTECT YOUR CAPITAL AS WELL AS PROFITS  

Thanks

Dr. Vasant Bele

These are individual views . Investors should take their own decisions, writer will not be responsible for losses

 Written and posted on 10th Jan. 2011