PATIENCE GAME......

Dear Investors

Market witnessed one more choppier day. Market started on cautious note and with some moves up and down closed on ‘FLAT FOOT’ at the end day, keeping investors ‘Guessing’ for next ‘Move’. Apparently 5603 is acting as good support while 5690 as a stiff resistance, keeping Nifty in ‘Narrow Range’

On 17^th Market tested high of 5696 on upper level and after moving down to 5624 closed

at previous closing level of 5654.

What Next?

Whenever markets move in such small narrow range, with low volumes, the chances of it breaking violently on either side are very high. Going with the short term trend and cautious approach of investors (HNI,FII,DIIand Retails) any  small ‘Negative News’ or an ‘Event’ will cause a ‘Steep fall’ in market. On the other hand it will require great efforts for ‘Bulls’ to pull markets out of trouble. Nifty is forming ‘Lower Tops and Lower Bottoms’ indicating short term down trend.  5600 (200DMA) is giving good support while 5778 is acting as a resistance to bounce back.

If one has to go with technical data (Even fundamental events like Earning of Cos.)Are not supportive for ‘Upward Break’ with the event like RBI Policy around, chances that markets will have one more steep down move causing ‘Decapitation’. Of traders, investors and speculators

Technical View

NIFTY PIVOT IS AT: 5658

R1 (First resistance) is @ 5692

R2 (Second resistance) is @ 5730

R3 (Third resistance) is @5764

Significance

Lowering of the values of R1, R2&,R3, on daily basis (read previous blogs) indicates that nifty is unable to surpass previous days resistance on next day. This is definitely a ‘Bearish’ sign.

S1 (First support) is @ 5620

S2 (Second support) is @ 5586

S3 (Third support) is @ 5584

Significance

Increase in the valuations of the S1, S2, &S3 as well as reduction in the difference between R1/S1, R2/S2 &R3/S3 indicates narrowing of the range. This too is one more signal for the events to come ….’Down move’

Investors are advised to watch market levels carefully without taking any positions, Even…….

‘Compulsive Traders’ are advised to have ‘PATIENCE’, better to wait for markets to take a definite direction, till that time wait on sidelines.

 Break below5600/5580 on closing basis will take markets to 5380/5330 levels from where the present bull move started. For markets to resume ‘Up Trend’ again, It has to close above 5778/5820/5900 with good volumes. As on ‘Today’ markets are no where near the important resistance levels indicating that the ‘short term trend’ is down.

5DMA (Day moving average) @5736
20DMA (Day moving average) @5952
50DMA (Day moving average) @5973
200DMA (Day moving average) @5607

Significance

Market (Nifty) is very near 200DMA, indicating vulnerability to break down while the gap between 200 DMA and 50 DMA is too much indicating ‘Difficulty’ in reaching ‘upward’ trend line.

CONCLUSION

IT IS A ‘PATIENCE GAME’, SO WAIT FOR FRESH INVESTMENTS AND TRADES, TILL THERE IS A DEFINITE TREND. Till that time all ‘Bounces’ should be used to book profits or limit losses.

IMPRESSION

 FIRST HALF OF 2011 SEEMS TO BE A YEAR OF ‘SELL ON RISE ‘

NO NEW ‘STOCK SPECIFIC’ CALLS TILL THERE IS ‘EMERGANCE OF AN OPERTUNITY’

Thanks

Dr. Vasant Bele

These are my personal views, take expert opinion before investing