Who Will Have a 'Last Laugh' ?

 Dear Investors

The RBI and government's intentions to fight inflation have prepared the markets for a rate hike on January 25. But the ‘Quantum’ of the hike is the key for market and investors

Harsh stand on the part of the RBI ‘MAN’ will take markets to a ‘Rough Ride’

Though most of them are optimistic of minimal rise in Repo and Reverse Repo of 25bps ‘no body knows ‘Who will have a last Laugh’

So wait till cards of RBI are open, till that time ‘Go Blind’!!!!!!!!!!!!!!!!

Market Opening (Pre RBI Policy)

 Market will take cues from the global markets and is expected to open on a flat to positive note tomorrow. Trades can hold their either ‘Long’ or ‘Short’ positions till policy is open... With, a strict stop loss. For ‘LONG POSITIONS’ keep a stop of 5603/5580 level (any close below 5580 will have a cascading effect, leading to further fall to the levels of 5420/5380) while for ‘SHORT POSITIONS’ keep a stop of 5820/5880 (close above 5903 will take market to the levels of 5960/ 6003 and above. Indicating a ‘Resumption of up Trend’ till ‘Budget Fever’ sets in.

Depending on ‘RBI’s Magic’ there will be two Ranges in which market will move, till ‘Budget’

5800/5880/5960

5603/5580/5380

Technical View

PIVOT FOR NIFTY: 5732

R1 (First resistance level) is @ 5767

R2 (Second resistance level) is @ 5791

R3 (Third resistance level) is @ 5826

Significance

Pivot for 25^th is at R2 (5738, 24TH Jan) indicating a definite positive sentiment.Any close above R3

Will take markets to next resistance level of 5880/5903

S1 (First support level) is @ 5708

S2 (Second support level) is @ 5673

S3 (Third support level) is @ 5649

Significance

As a reaction to negative news from RB, markets may dip down to the levels of S3 (5649).Any intra day bounce back  from days low of 5640 to the levels of S1(5708) SHOULD BE USED TO CREATE LONG POSITIONS with a stop at 5603.

VXI (Volatility Index)

PIVOT is @ 20.47

R1 @ 21.14, R2 @20.10, R3 @21.88 

S1@19.80,

S2 @19.43

S3 @ 17.76

Significance

All this indicate a great ‘Volatile Trading Day’ ahead.

DAMs( Day Moving Average)

5DMA@5713
20DMA@5882
50DMA@5917
200DMA@5617

Significance

200 DMA @ 5617 is most important support, market have been testing this level frequently.

Break below 5617 will change medium term trend ‘Down’

Immediate support is neat 5DMA 5713.

Close above 5882 50 DMA will suggest completion of the ‘Corrective’ phase of the on going bull market.

COMMENTS

Beginning will be with ‘Cautious Optimism’. RBI policy will be a short term deciding factor.

One need not panic even  if there is a ‘Steep Fall’ during the day due to RBI’s rate increase and/or

Change in CRR or hawkish comments regarding Inflation, Liquidity, Bank lending, GDP etc. All such falls should be used to create long positions with a stop loss at 5580/5600

Impressions

RBI Move will not be (even with 50 bps rise) a trend decider in Medium Term.

STOCK SPECIFIC

There are number of stocks which can be looked up on as ‘Good Buys’ for short trading bounce

With stop loss at 5589 Nifty level

Banking stocks are in a short term up move (corrective)

ICICI Bank

Axis

SBI

CBI

Andhara Bank

Indus Ind Bank

UCO

Federal Bank

BOB

All textile stocks too are in a short term up move after going through a correction

Arvind

Alok

Himatsingka

Suryalata Spinning

S Kumar

Other Mid caps

Blue Star

SKF

Sujana Tower

Celestial Lab

Jyothi LabEMCO

Dewan Housing

Renuka sugar

Gulshan Poly

Mid Cap IT

Mphasis

Polaris

Sonata

Tutis Tech

Hexaware

One can choose some of these as long term byes at all dips

RBI, EXPIRY, and LIQUIDITY are the determining factors.

. Thanks

Dr. Vasant Bele

All the views are personal. Please invest after consulting your expert.