Dear Investors
Bears have taken TIGHT GREEP on dalal street, pushing bulls to the wall
Numbers of stocks, from different sectors, were wrecked on dalal street either
because of rumors or bad performance. Which set a ‘FIRE ON DLAL STREET
causing stampede while exiting the positions, in that Nifty tested the day’s low
of 5225, short covering at the end recovered the Nifty to close at 5253
Today, it was a clear state of lack of confidence, which can be attributed to
1) FII changing hands from Emerging markets to Developed markets
2) Valuations were non realistic
3) Corporate earning not satisfactory
4) Margin compression due to high raw material prices, commodities
5) Increasing Inflationary pressure
6) Increasing input costs
7) GOVERNMENT APATHY in dealing with scams , policies
AND MOST IMPORTANT
8) BAD CORPORATE and GOVERNMENT GOVERNANCE
All this was responsible for ‘Melt Down’ in stock prices
What Next
Market is in no mood to recover, volatility has been increasing, there are no buyers ,
every news,’ Good or Bad’, is either used to book profits or create short positions.
Investors and traders are advised not to panic. It is advised to stay away from,
trading in market and start investing in better performing sectors and front line stocks;
use every correction to buy in installments. Traders are advised not to trade till
there is emergence of a definite trend.
There is the possibility that Nifty will test next support level at 5200/5180
in few trading sessions.
Technical View
Nifty Pivot: 5272
R1 (First resistance level) is @ 5319
R2 (Second resistance level ) is @ 5386
R3 (Third resistance level0 is @ 5433
Significance
Nifty pivot, is well below 5330 indicating a bear grip on the market. Only if Nifty
closes above R2 (5386) there are some hopes for bulls to take some short term
positions. Any bounce above R2 can be used to go long till the R3 (5433)
level which will act as a strong resistance to the ‘Pull Back’
S1 (First support level) is @ 5205
S2 (Second support level) is @ 5158
S3 (Third support level) is @ 5091
Significance
Any close below S1(5205) will open flood gates for bears to take markets down
by 100/150 points.
Close below S1 can be used to create short positions with a stop at 5180 and
target of 5060
VXI (Volatility Index)
PIVOT IS AT 24.41
Significance
VXI is above the crucial level of 24 , there is every possibility of increase in
volatility in coming days
to bouts of panic
DMAs
5DMA@5377
20DMA@5577
50DMA@5812
200DMA@5627
20DMA@5577
50DMA@5812
200DMA@5627
Significance
The gap between 5DMA (5377) and closure of the day indicates ‘Hard work’ required
to be done by ‘Bulls’
on going correction; otherwise market may grind between the levels of 5180/5330
for some more time
COMMENTS
It was another volatile session in Indian Stock Market. Markets traded in high choppiness
and closed in red. Technically Nifty's short term trend is bearish and Nifty is trading below
important support level of 5330. And all the DMAs It is expected that weakness will
continue below 5,330 levels. Nifty,s next support is at 5205/5180, if Nifty bounces from
5205 then the next range will be 5240/5330.
IMPRESSONS
Ground Reality is that, Fundamental correction has been completed, even
technically markets are in over sold situation, but ‘Sentimental Correction’ has
created a Panic Situation on Dalal Street
It is’ high risk low reward’ situation for BEARS, so 'no fresh shorts', on the
Contrary small long positions with reasonable stop loss will give profits, because
Market may bounce in near term. So either ‘NO TRADES
Or SHORT TERM LONGS’ will be the best policy.
Stock Specifics
Try to built short term longs in
BANKS
IT
FMCG
RIL
PHARMA
Polaris
Mphasis
HCL Tech
Ramkey Infra
EMCO
Graphite
ACE
Talwalkars
Artson Eng.
Celestial Lab
Petronet LNG
Pipava Ship
Jindal Poly
Techpro
Keep small positions with stop loss at 5160 Nifty level
NO PANIC, HOLD NERVES
Thanks
Dr. Vasant Bele
All the views are personal; invest with care and after consulting experts
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