SIMPLY BRUTAL.....

Dear Investors

On 8^th Feb.11 markets were ‘Brutally’ hammered down to the important support levels of 5300 Nifty and sensex below important support of 18000. There was heavy selling in all the sectors and in all the stocks, Large, Mid and Small caps. Nifty has just managed to close above 5300 levels, which is only hope for the bulls to come above the water levels

What Next:

To answer this, there are no ‘Fundamentals’ or no ’Technicals’, one has to ‘Toss the coin’ and say ‘HEAD or TAIL’ if it is 'Head' its not going to break below 5300 ,if its 'Tail', breaking of 5300 is inevitable, so is the volatility and uncertainty in the markets,. this is just to show the 'Sentiment' in the market, it is not moving on any of the principals but 'Panic'

 Markets are relentlessly going down without ‘Fundamental reasons or technical reasons. My gut feeling says ‘ this market is going to test the lower levels , 5200/ 17500 and 5180/ 17180. SO HOLD YOUR trades till a definite trend emerges out of all this turmoil

Technical View

Nifty Pivot: 5349

R1 (First resistance) is @5395

R2 (Second resistance)is @ .5478

R3 (Third Resistance) is @5524

Significance

It looks that markets are not in a mood to follow technicals, it’s a market of ‘Nervous Sellers’

Still for all those who are hope full, Market to survive on going Brutality has to test R1(53950

And go ahead, that will give some hopes to bulls

Any bounce above 5515 should be used to book profits and create short positions

S1 (First support)is @5266

S2 (Second support)is @ 5220

S3 (Third support) is @ 5137

Significance

All the support levels are way below the moving averages, indicating that the market even if stops at any of the levels, it is in Mid term down trend.

Any bounce from lower levels should be utilized to book profits

All the long term investors should use S2(5200 as a level to start nibbling in Nifty stocks and some of the Madcap till S3 levels, any break below S3 , on closing basis will take Nifty to a new lower range .

VXI (Volatility Index)

PIVOT: 24.41

Significance

As the volatility index has gone past the important level of 24, and reaching significant levels of 29/30 ., markets will go through bouts of uncertinities, for which all the traders should keep strict stop losses for their positions. Market needs stability and a phase of consolidation, which will be dependant on VXI

DMAs

5DMA@5413
20DMA@5602
50DMA@5824
200DMA@5627

Significance

Nifty is far way from nearest DMA, 5DMA (5413), indicating a negative sentiment

Unless market moves above 200DMA(5627) there will be no sustainable up move, any bounce back should be used to book profits or create short positions..

COMMENTS

Technically markets are in downtrend and looking weak on chart. Indices have closed below the crucial support levels of 17,820 / 5,350 which suggest weakness. For next few trading sessions if Nifty breaks the level of 5300 with big volumes then the immediate support is at 5240/5190(17301/17110). Immediate resistance is at 5380/5425(17700/18000).

IMPRESSIONS

Markets may test the lower levels , Markets are due for a short term bounce before starting next downtrend. Watch the bounce to exit positions or Trade for the bounce with stop losses on either sides because it is difficult to predict the 'Tilt' of the coin

Stock specifics

There are number of stocks which are in a ‘Long Term Buying’ range, but it is not adviceble to go for them till the general trend gets settled

Traders can take short term long positions in

BANKING

SUGAR

PHARMA

IT and

AUTO

Front line stocks for small profits

Investment buying should be postponed till the ‘Aggressive slide’ of the market stops, Keep cash and some 'home work' at hand till that time...........

CRISIS MANAGEMENT IS THE KEY

HOPE  FOR THE SOFT LANDING

Thanks

Dr. Vasant Bele

All the views are personal, Investing should be done after consulting experts