So near So far

Dear Investors,

Nifty closed at 6143 on the last trading day of the year 2010 with an optimistic note for 2011 to reach the all time top of 6330 (January 2008). There is every chance that markets may take out this and proceed for new top in coming months if,

1)     If opposition party allows to conduct the ‘Budget session’,

2)     Earning session starts with good results by the corporate,

3)     Government takes some bold decisions like ‘Diesel D-regulation’ ‘Fertilizer Policy’,

4)     FDI in retail,

5)     Crude prices, Inflation control and RBI policy regarding interest rates

6)     Last but important, what happens to the FII inflows across the border??

One thing is certain that to reach the top, HNI, FII, and RETAIL Investors have to put money across the board (even though values are fair). It will require ‘some event’ to propel the markets on fast track. Simultaneously it will require a dramatic event either in India or across the borders to take markets below immediate supports 5990, 5888, and 5690 which looks beyond vision.

Technically

Since last few weeks /months we are going through phases of consolidation followed by new tops. Nifty consolidated at every stage like, 4667 to 5330 range to give a break, 5330 to 5690 and 5690 to 6090, indicating that during every break out it has formed a higher top and higher bottoms. Nifty has crossed an important resistance of 6115 on closing basis. Probably, it will move in a next range of 6115- 6220 to consolidate and break to clear the all time top of 6330

Traders

During this consolidation, there will be ‘new highs’ and ‘corrections’ to highs. Traders should use the higher levels to book profits so as to re-enter in corrections.

Investors

Investors should use the dips to create long positions for next new top post 6330.

Stop loss

The stop loss level for this phase of consolidation is placed at 5690 for long term investors, while traders should watch for 5988/6003 as stop loss.

.

One thing is certain that,

Markets will require some extra ordinary event to break drastically on either side.

Otherwise ‘CONSOLIDATION’ is the ‘MANTRA’ during coming weeks prior to ‘Budget’ (which may act as a ‘Trigger’).

Statistics

Pivot for Nifty is @ 6128

R1 (First resistance) is @ 6153

R2 (Second resistance) is @ 6172

R3 (Third resistance) is @ 6203

Last closing day, Nifty closed at R2 levels (Read the last article)

S1 (First support) is @ 6109

S2 (Second support) is @ 6084

S3 (Third support) is @ 6065

Stock specifics (MOST OF THE STOCKS ARE TRADING AS WELL AS INVESTMENT BUYS)

TISCO                                               ARVIND

STERLITE                                        HIMATSINGKA SIDEK

HINDALCO

CROMPTON GREAVS                  HERCULIES HOIST

ADOR FONTECH

ITC                                                     HYDERABAD IND.

HUL

YES BANK                                       EVEREST KANTO

CHAMBAL                                       GMR INFRA

RCF                                                  ROLTA

MENGLORE CHEMICALS            HEXAWARE

EMCO                                              POLARIS

SHARP                                            TILAKNAGAR IND.

SUJANA TOWERS                        RANBAXY

GLENMARK                                    LUPIN

IRB INFRA                                       PFC

ADANI POWER                              UNITED PHOSPHEROUS

These are some of the stocks, but there are number of mid caps which will be moving if at all market has to cross the 6330 levels, because they are battered to lows low.

BE OPTIMISTIC BUT WITH CAUTION

Thanks

Dr. Vasant Bele

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