LIMBO.. a state of awaiting...

LIMBO

             A STATE OF AWAITING

Dear Investors

On Wednesday market opened with down tick at 5452(sensex at 18234), trading was lackluster all the day. After a long period of hanging in a small range markets slipped in red to close at 5437(sensex at 18178), near to the vital support at 5440(sensex 18201).Days low was at 5427(sensex at 18150), it was again global situation and crude prices responsible for suppressed trading in Indian market

What Next

From last two trading sessions market is trading in small range for the day and getting closed nearer to the days low, indicating that traders are not ready to carry the positions for next session. Market participants are waiting for events like ‘Expiry’ and ‘Union budget’ creating a state

of ‘LIMBO’. Activity is limited to small range, on either side. All this indicates uncertainty in trader’s minds.

Tomorrow’s expiry may create some volatility during the day. Nifty is moving in 5400/5500

Range. Any fall below 5380 will have cascading effect on further course of markets. Nifty must close above 5480 to scale higher levels of 5515/5557 where some selling pressure may take i

Nifty back to 5440. It is suggested not to create major positions on both the sides. Railway budget

May give some clue for the coming ‘Union Budget’, if positive, market will try to test 5600 /5639

(200DMA)

Next few days are important for Indian Markets. All depends on:

Global Situation: Conditions in Oil Producing countries, Situation in Libya and surrounding countries, US economic data(Housing)

Domestic Events: Inflation Numbers

                  F&O carry forward situation for next series

                  Economic survey report

                  Railway Budget

                  Uncertain probabilities during ‘Week End’ followed by

                  Union Budget next Monday

                

With so many hurdles in road ahead, it is unlikely that traders will carry, (either long

Or short), positions for next week. This may lead to high ‘Volatility’ during trading days

Ahead.

Levels to Watch

UPWARD: 5480/5515/5557

DOWNWARD: 5420/5380/5330

Significance

5480 will be the first hurdle for upward move if taken away Nifty may test 5557

In a fast move, where selling pressure is likely to stop further up move

If Nifty trades below 5420 with high volume it may take out lower levels of

5380 in a flash, to test 5330.

Traders are advised to keep strict stop loss on either side at  of the trade 5380/5557

To protect losses

Technical View:

PIVOT FOR NIFTY: 5453

R1 (First resistance) is @ 5479

R2 (Second resistance) is @ 5521

R3 (Third resistance) is @5547

Significance

Pivotal level at 5453 will be the most important one, around which market is likely move.

Nifty has to close above 5479(R1)  to remain in up move any close below that will keep

Traders guessing regarding next move.

Close above R2(5521) will be ‘Positive’ for markets as last break out was from 5515.

S1 (First support) is @ 5411

S2 (Second support) is @ 5385

S3 (Third support) is @ 5343

Significance

In a given situation Supports have become more important that Resistances, because

Nifty is constantly trading nearer to the support levels than Resistance levels. The fear is that

Any small Negative News will be enough for Nifty to ‘Break Down’ and may create a ‘Panic’

Situation.

Traders are advised to watch S1 (5411) and S2 (5385) as most significant from short as well as

Medium term point of view.

VXI (Volatility Index)
Pivot At: 26.65

Volatility is the ‘Word’ of the days to come, since last few trading sessions it is moving in a dangerous zone between 24/ 30.Once expiry is over , it is expected to settle down to lower levels till the day of ‘Union Budget’

High volatility is suggestive of ‘Uncertain’ sentiment

DMAs( Day Moving Average)

5DMA @ 5486

20DMA @ 5437

50DMA @ 5715

200DMA@ 5642

Significance

Nifty has to trade above 5DMA at 5486 to maintain short term up move , this

 will act as First resistance level

20DMA is important support level below which Nifty may slide down to 5400/5380

Levels with a downward bias

200DMA is possible if Nifty cross the all important resistance at 5600.

Traders on short side should keep 5600 as a stop loss while new shorts can be

 built below  20DMA

Traders on long side can carry forward positions till Nifty is above 20DMA

COMMENTS

In view of the unsettled conditions in ‘Oil Producing’ countries and rising oil prices

Markets will be in a ‘UNCERTAIN’ territory.

 Expiry will create some fluctuations on both the sides depending up on ‘Covering and Carrying’ the positions in next series. For 24th all trades should be with strict stop loss on either side.

 All ‘panic fall’ to the levels below 5400/5380/5330 can be utilize to do, ‘Bottom fishing’, in part, by long term Investors. In view of ‘Union Budget’ on Monday ‘investment buying can be done in ‘Infra structure, Capitol Goods, Construction, FMCG and IT’ sectors. This is with the view that Finance Minister will ‘out line’ some plans for ‘Infrastructure Spending’. Auto &Banks will be vulnerable for further profit booking, in case there is change in Duty structure.

At this moment market is driven by ‘Ifs and Buts’ because markets always move on

‘Sense, Incidences and Events’ and these are in ‘abundance’ at present making traders

skeptical about future

Stock Specific

Day Traders

SBI

ICICI Bank

ITC

HUL

ACC

Ambuja Cement

Ranbaxy

Lupin

Hero Honda

IVRCL

NTPC

BHEL

Long or Budget traders

Ashok Leyland (Long term)

TVS motor (Long term)

Mphasis

NIIT Tech

Hexaware

Geometric

Tutis Tech

KEI Industries

Camphor and Allied

Reliance Power

Reliance Communication

EMCO

Ramkey Infra

GMR Infra

GVK Power
Techpro Systems
For large cap stocks keep stop loss at 5/7% down levels


IMPRESSION:

 IN NO MAN’S LAND, 

Thanks

Dr. Vasant Bele

All the views are personal, Invest after consulting experts