Dear Investors
Market for Next Week( 21 st to 25th Feb 11)
During last week, what we have seen is a technical pullback rather than something which has fundamentally changed because inflation has hit a high, you do not know what the budget outcome is going to be, fundamentally on ground nothing has really changed.
The Five day ‘pull back ‘ rally was abruptly broken in last one hour on Friday.
Nifty could not sustain higher levels and failed to cross important land mark
5600. After getting close to 5600 nifty drifted sharply down to the level of 5441
And closed at 5458 just short of the day’s low. This fall was due to number of rumors on D’ street, regarding 2G, ADAG co, Profit booking by traders and fresh short built up by bears.
There was extreme volatility all the day. All the sartorial indices ended in red. While the ‘Pull Back’ rally was on average volumes’ the fall on Friday was with High volumes indicating a ‘Fear Factor’ in the minds of traders.
’On the back drop of, Eventuality, Fear and high Volatility markets will be ‘Fragile and Unpredictable’ in coming week
There is a range of reasons for ‘The Fragility and Unpredictability’, partly linked to politics , partly to earnings and lowering of economic growth scar, which is on the cards, there is every chance that the Growth might scale down by few points leading to ‘Erosion’ of the Sensex EPS(Earning per share),. That was probably the key catalyst that pushed the market towards lower levels. Once down from 5600, the triggering of ‘Stop losses ‘took the levels further down to violate significant support at 5515/5470
What Next
Next week is full of events like, Expiry on 24th, Railway Budget and Pre-budgetary
Expectations, as ‘The Budget’ comes on the first day of next week. All this will keep ‘Volatility’ at its top.
The Indian VIX which is currently at 24.18 and it was up by 1.61 points or 7.13 %. It indicates that the market will continue to volatile in the short term.
Market, Bulls, may try a weak attempt to push the markets up to 5580 levels before expiry, which if does not sustain and starts falling again below 5440(Friday’s Low) then it will enter in ‘Bear Territory
If Nifty sustains above 5440/5400 levels then it may start upward journey once again. For that the flow of ‘Bad News’ and ‘Bad Events’ has to stop and government should take some ‘Bold’ steps on, Fertilizer policy, Infrastructural spending, JPC(Joint Parliamentary
Comm.) And Corruption cases.
Even small good news in ‘Budget’ will inspire the ailing bulls.
For the coming week immediate resistance is at 5580/5600 and Support is at 5440/5380
Levels. Break of the lower level 5380 will again take markets to 5200/5180, while 200
DMA at 5635 will be a stiff resistance on upward move.
Levels to watch:
UPWARD: 5515/5580/5600
DOWNWARD: 5440/5400/5380
Sectors to Watch
Banking and non-banking financial cos.
Infrastructure
IT
Capital Goods
COMMENTS
From last weeks trading one can say, Markets will never allow you to ‘Catch It.’
That is the way prices move, Rallies and Dips are very fast, traders can catch
Only last few hundred points, so one has to be very much ‘on his feet’ during next
Days as volatility will be very high. Day traders are advised to keep strict stop losses
according to suggested technical levels. Investors should focus on ‘Fundamentals’
and pick good Stocks at every fall, for long term. So for as long term investor, who
is not really worried about the next 6 months, this is a good time to buy. However
if you want to wait for the bottom of the market and you want to buy right at the
bottom, then my suggestion would be wait for 2/3 Months. So I think patience is the
best policy at this juncture.
What can influence markets during next week?
Expiry (on 24th Feb)
This will be the precursor of ‘Volatility’ in market. Traders must keep stop losses
To protect positions. Investors can use steep falls to ‘Do bottom fishing’ in small
installments. Nifty may test 5600 in a flash and 5400 also. Close below 5449 will be
‘Bearish’.
Railway Budget (Friday 25th)
This is non event as far as gross market is concerned. It will be significant for
Companies like Texmaco, Kalindi Rail, and ARSS Infra etc.
Main Budget (Monday 28 th)
What should you look for………..
.GDP Projections
(Gross Domestic Product)
The market VALUE of all final goods and services produced in a country in a given year,
equal to total consumer, investment and government spending, plus the value of exports,
Significant in measuring the growth projections and estimating the standers of living
of the people of Nation
Fiscal deficit
What Does Fiscal Deficit Mean?
The primary deficit of Government can be defined as the difference between
current ’ Government Spending’ and ‘Total Revenue’ from all types of taxes.
While the ‘Total Deficit’ is spending plus interest payment on the debts minus
tax revenues
GST road map
Goods and Service Tax
Goods and Services Tax (GST) is a part of the proposed tax reforms that center
round evolving an efficient and harmonized consumption tax system in the
country. Presently, there are parallel systems of indirect taxation at the central and
state levels.
Tax Reforms
Like excise cut withdrawal on Automobile sector
Taxation on Information Tech. sector
Changes in Short &long term Capital gain tax.
Subsidy allocations
Road map for Infrastructural spending (Roads and
Power projects, etc.
IMPRESSIONS
FUNDAMENTLS CAN NOT BE CHANGED IN A DAY, SO ALSO
THE TECHNICALS ,
MARKETS IN SHORT TERM WILL FOLLOW TECHNICALS
Investors are advised to 'execute caution' in day trades, as volatility willCreate wild swings in markets,keep limited exposure
Thanks
Dr. Vasant Bele
All the views are personal, invest after consulting experts
(For Monday read 'Markets for Monday' as a separate post)
No comments:
Post a Comment