Dear Investor
Nifty started with a down tic at 5850, and continued the downward journey after ‘Disappointing’ results by Infosys. Nifty tested the lower level of 5736 (fortunately above previous low of 5711, Intraday on 12th Jan.) to close with some gains from low at 5751.
Market is not gaining strength because there are no fresh buyers, either FIIS,DIIS or RETAILS, on the contrary every rise is used to ,a) book profits in relatively over valued sectors like , Banking, Auto and FMCG, b) Every rise is used bears to create ‘fresh shorts’ in already beaten down sectors like Reality, Infra, etc. This phenomenon is dragging Nifty to lower lows after every ‘short covering’ rally ( which are Pseudo Rallies)Unless this is controlled be fresh investments market is unlikely to get strength
The Fear is
Today’s fall was caused by ‘Disappointing results ‘by Infosys. Market is going to watch coming ‘Earning season’ carefully because it will be a ‘deciding factor’ for its health in future. As it is Inflation, Rate hike and lack of liquidity is weakening markets and sentiments of traders and investors, if ‘Earning’ falter there will be no takers to stocks leading to panic selling like 2008. Unless and until Government and concerned authorities address the ‘Macroeconomic’ factors there is no chance that markets will test 6118, and then forget about 6300.
Technical View
Only positive thing is, Nifty has closed above 5700 and has not broken (intraday) yesterday’s low, 5711
But just ‘not testing’ the low is not enough, Bulls will have to do ‘Lot more work’ to propel Nifty above 5880/ 5960 levels to call an end to the ‘correction’
To call it a ‘Bull Rally’ continuation, Nifty has to close above 6090/6115 levels. Any bounce back below this should be looked up on as ‘Dead cat bounce’ and should be used to get out of either ‘profitable’ positions or reducing further losses
Keep watch on……...
One has to watch 5711/ 5690/5620 levels carefully, violation of these will be an early guide to the beginning of a’ Trend Change’
Closure of Nifty above 5960/ 6003/ 6080 should be looked up on as indication of ‘End of the correction’ To resume fresh ‘UP TREND’ Nifty has to close above 6181.
Technical Levels
NIFTY PIVOT AT: 5781
R1 (First resistance) is @ 5826
R2 (Second resistance) is @ 5902
R3 (Third resistance) is @ 5947
Significance
All long positions created at lower levels should be booked at 5947, considering that there may be a bout of profit booking
Fresh ‘Shorts ‘can be created if, Nifty close above R3 with a stop loss at 6003/6090.
R1 can be used to cover shorts and create fresh long positions with the expectation of Nifty testing R3
Significance
S1 (First support) is @ 5705
S2 (Second support) is @ 5660
S39Third support 0 is @ 5584
Any closure below S3 should be treated as a ‘Warning Bell ‘for ‘bear market’
(It is close to 200 DMA @ 5604).
As long as Nifty remains above S1 (5705) hopes for ‘Revival’ of trend remain alive
20DMA@5982
50DMA@5992
200DMA@5604
50DMA@5992
200DMA@5604
IMPRESSION
Over all pictures suggests that ‘Immediate trend is down’ and ‘Bear clouds are still hanging low’
STOCK SPECIFIC
All those who believe that everything is not lost should do ‘Bottom Fishing ‘In
RIL
HIDALCO
STERLITE
L&T
ICICI BANK
TATAMOTORS
BHEL
POLARIS
NIIT Tech
MPHASIS
EMCO
Elecon Eng.
Tecpro Systems
Gralhaite
Nelcast
Jindal Poly films
Petronet LNG
Indusind Bank
Celestial Lab
Ador Fontech
Hercules Hois
(All prices are at last closing values)
One need not buy desired quantity in one go; spread your buys in every dip.
HPOE ‘BEAR CLOUDS’ WILL NOT RAIN TO CAUSE ‘FLOOD OF LOSSES’
Thanks
Dr. Vasant Bele
These are individual views. Investors should take their own decisions; writer will not be responsible for losses
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