Tug Of War.......

  

Dear Investors

On 18^th Jan, markets got the legs of TCS, AXIS bank results and Global cues to run away from ‘Bear Attack’. Market started with ‘Gap Up’ opening and continued the journey upward with the help of ‘Short covering’ and some ‘Bottom fishing’ in bitten down sectors and stocks. Nifty tried to create scares in the minds of ‘Bulls’ by going down to 5671 but at the end recovered to closed just short of the day’s high, 5724, Days high was 5730

What Next:

Nifty has not broken the all important, immediate, support of 5603, which is also near 200DMA 5607, It was third occasion that Nifty bounced back from 5600.To confirm

‘End of Correction’ and resumption of ‘Up trend’ nifty has to close above 5778/5800/5880 levels with volumes which will take away strength of ‘Bears’. One can not say that Bull are back until nifty is beyond 6003, till that time ‘Tug of War’ between ‘Bulls and Bears’ will continue. Investors should have small exposure in market with stop loss in place. It is not advised to have investment buys till Nifty close above 6003.

So play safe between 5700-5880 range, and think of aggressive buying beyond 5960.

Markets are waiting for ‘Directional’ guidance from RBI policy, on 25^th Jan 11. Till that time ‘volatility’ is the ‘Trend’ 

Technical View;

Pivot For Nifty: 5708

R1 (First Resistance)is @ 5745

R2 (Second resistance) is @ 5767

R3 (Third resistance) is @5804

Significance

For short term trend to turn in to positive mode Nifty must take away 5800, which will give some stability to markets till RBI policy is out.

Long positions created at lower levels should be guarded with stop loss placed at Nifty

At 5690,

No fresh shorts should be created till Nifty breaks 5708 (Pivot Value)

S1 (First support) is @ 5686

S2 (Second Support) is @5649

S3third support) is @ 5627

Significance

Break below S3 will indicate continuation of the ‘Corrective’ trend, and all long positions at that level should be cleared and one can go for fresh ‘Shorts’

The range between 5745 -5649 should be looked up on as TRADING’ zone, the stock specifics depends on individual’s interest and liquidity of the stock

20DMA@5938
50DMA@5961
200DMA@5609

Significance

Any close above 5961 should be looked up on as positive.

200DMA should act as support for the Trading Range

Short Term Strategy (Range 5800, 5745-5649)

Sector View

IT SECTOR (Polaris, KPIT,Sonat.Tata Elexi)

FMCG (ITC, HUL, DABUR)

PHARM (Lupin, Ipca0,

METALS (Hindalco, Sterlite, Tisco,)

BANKING should be used as a ‘TOUCH and GO’ sector

COMMENTS

As long as RBI policy is not out , traders can use the Nifty Range for trading purposes with Stop Loss at 5690 on long side. Those who are having Shorts in the market should think of covering if Nifty close above 5888.No fresh shorts above

Impression

The ‘Pain Is Not Over’ so be ready for some more Trauma. Market is on Pain Killers’

Like IT results, Global Sentiment, and Short covering, Wait for ‘Hammer Effect’ of RBI

Thanks

Dr. Vasant Bele

These are personal views; one should consult Experts before investment Decision