Dear Investors
Background for the ‘Event’ (Union Budget)
Monday being the day of ‘Union Budget’ a vital eventIt is after long time that markets are at very low levels
While going for Budget and there was no pre budget rally.
It has been argued ferociously that as there are no expectations
From this budget, there will be no ‘Disappointments’ and so
Market may go soft or flat. One thing is true that markets have
come off relentlessly during last few trading sessions.
There are very few long positions ‘Speculative or Cash’
But the fact is, there was very high ‘Delivery’ base selling during
Last week, and there were no buyers in the market against huge
Selling, indicating that Money has flown out of Indian equities.
FM: BACK TO THE WALL(in a tight spot)
Ground reality is that, Inflation, Increasing Rates, Increasing oil
Prices and Average performance by Indian Industrials has started
Threatening expected ‘Economic Growth’ along with ‘Recovery
In Developed’ economies, led to Flight of money out of India,
Pushing FM 'In a Tight Spot'
‘Fundamentally’ Indian economy is delicately poised. It has to
Be seen’, tomorrow, how FM steadies the ship. Till that time one
Has to go by Technical aspect of the market
Technical View
Nifty has immediate resistance at 5300/5380 and only sustaining
Above it will move towards 5400. While immediate support is at
5170/5115 levels, closing below this will create panic once more,
Which will result in markets gravitating to a new range, 5060/4880
Historical Levels
Historical chart for Nifty shows that we are at 5303, just above the line 3
Which is placed at 5170, If Nifty falls to the line 3 and below, then there
Are very weak supports above 5000 level? Any panic situation may lead
To break 5000 taking Nifty to lower supports at 4880.
( See chart at the bottom)
( See chart at the bottom)
Current Situation
Pivot for Nifty is at: 5291
R1 (First resistance) is @ 5350
R2 (Second resistance) is @ 5397
R3 (Third resistance0 is @ 5456
Significance
Any close below Pivot (5291) will be a bearish sign, one should keep
This as a significant level, as immediate stop loss for long positions
R1/R2 is the most important resistance levels for short term trend
For Nifty, if not sustained then, down trend will resume.
Bears can create short positions at R3 (5456) with a stop loss at 5515
S1 (First support) is @ 5244
S2 (Second support) is @ 5185
S3 (Third support) is @ 5138
In coming days the support levels are more significant than the
Resistance levels because even without getting above resistances
market can consolidate in two resistance levels without breaking
supports.
Any violation of R2 (5185) will be opening doors for panic selling,
leading to lower levels. Maintaining S2(5185) is most important in
short term
VXI (Volatility Index0
Pivot Is at: 27.83
Volatility will be at its peak during the day, both before and after
Budget speech, all depends on the interpretations of the statements
by FM
DMAs( Day Moving Average)
5DMA 5398
20DMA 5410
50DMA 5690
200 DMA 5644
5/20 DMAs are significant, as long as Nifty trades below these,
Short term trend will be bearish
Any close above 5600/ 5644 wills the game changer, which looks
Very difficult in near term
All the long positions should be protected with a stop below 5DMA
Bears can create fresh shorts above 20 DMA to be protected with a stop at
5515/5480
COMMENTS
It is advisable not to have large positions before ‘Budget Speech’ or
Should have strict stop loss at 5177
Long positions can be created in Infra Structure, Capital Goods,
and Banks, IT and FMCG
You can afford to buy at higher levels, when ‘Trend’ becomes clear,
Than to buy and loose in 'uncharted territory'. So please wait for clear
Vision because ‘Market Is Not Going to Run in Hurry’.
NO STOCK SPECIFIS BEFORE BUDGET SPEECH
Impressions
Looks we are ‘Headed Low',post budget
Read Weekly Report In separate blog'Balancing
Thanks
Dr. Vasant Bele
All the views are personal, invest after consulting experts
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