Be Optimistic not Euphoric

Dear Investors

On 3^rd Feb Nifty did a spectacular comeback, may be on the back of ‘Short covering’. After a subdued opening at 5430 Nifty scaled a high of 5532 to close

At  5526. Before that Nifty tested the crucial 5400 at 5418, but good buying in Banking, Reality and Sugar sector lifted Nifty from days low.

What Next

OPTIMISM without EUPHORIA

It seems Nifty has taken a temporary breather at 5400 and bounced back above psychological level of 5500.

Optimistic View…

Nifty was overdue for a substantial pull back from the lower levels, this may extend

to 5600. Any close above 5630 should be taken as a significant change, otherwise it

is likely that this pull back will get aborted below 5580/5600 levels

Euphoric View

I f Nifty manages to cross 200DMA (5626) and moves to 5770/5800 levels with great volumes on closing basis, then one has reasons to be ‘Euphoric’

Practical View

A) From current developments and past movements it looks that Nifty will move in one

More range 5380-5570 before starting one more down trend

B) If at all 5400 is to be new bottom(Higher bottom above,5361), Nifty has to move in an upper range of 5449-5600 and go on increasing the values of Range to consider as end of the on going ‘Correction’

Macro and Micro picture suggests to be ‘Cautiously Optimistic’, while sentiments are pointing towards a new ‘Lower Range’ after the current ‘Euphoria’(5330-5480)

Technical View

PIVOT FOR NIFTY: 5492

R1 (First resistance) is@5566

R2 (Second resistance) is @ 5606

R3 (Third resistance) is @ 5680

Significance

To set in sight for up trend, Nifty should cross R3 (5680),any close below R3or nearer to R2(5606) should not be taken as long term optimism.

Bulls can create and carry short term ‘long positions’ up to R3 (5690), to be booked at this level

Bears should create ‘Shorts’ at every rise up to R3 (5680) and wait for next move of the Nifty.

S1 (First support) is @ 5452

S2 (Second support) is @ 5378

S3 (Third support) is @ 5338

Significance

Any close below S3 should be taken as a beginning of new ‘Lower Range’

As long as R1 is maintained chances of testing 5600 are high

Bears should start fresh short creation at R2

DMAs

5DMA       5479

20 DMA    5682

50 DMA    5850

200 DMA  5626

Significance

5 DMA(54790 will be strong support to the current ‘pull back rally’ close below which will start a fresh down trend

20DMA (5682) will be the limit to current rally , if crossed then, change in trend is eminent

A possible range is 5479-5626

COMMENTS

Markets after few down sessions have bounced back. This bounce will move in an upper channel of 5400-5580. If Nifty close above 5600 then there is a good chance that it will cross 5680/ 5770 in near future.

All upper ranges should be utilized to book profits unless Nifty cross 5820/5880 levels

Bear have a wide range to create and maintain short positions, 5570/5800

Long term investors should wait for lower levels, 5449-5380, to do bottom fishing

Impressions

Not Out of Woods Yet, No reasons to be 'Euphoric'

Stock Specific

Short term traders can buy in…..

Banking

ICICI

SBI

YES BANK

UCO

DENA

INDU INND BANK

Mphasis

Infinite Computers

Arvind

Bombay Rayon Fashion

Suryalat spinning

Nelcast

Celestial Labs

Renuka sugar

Rajashree Sugar

Crompton

Lanco

Ador fontech

Campho and allied

All buying should be with stop loss

Thanks

Dr. Vasant Bele

All the views are personal, Invest after consulting the expert