Market started the trading with small gains and maintained a positive
trade till FM started his ‘Budget Reading’ In early part of the second half
it appeared that budget is going to be a game changer leading to euphoric
buying and short covering led to soaring Nifty to day’s high at 5477.But
during last hour after budget ,Market did a ‘Summer Salt’ and lost the
early gains. Nifty closed just above previous close at 5333 leaving traders
guessing whether it is ‘Thumbs up or down’?
Days High/Low/ close
Open: 5330/ 17811
High: 5477/ 18297
Low: 5308/ 17719
Close: 5333/ 17823
What Next
of Union Budget 2011 was slowly vanishing. There were diversified but
cautious opinions regarding budget but, over all ‘Tone’ was a ‘Neutral or
Harmless’ to market
Main question now is
a) Will this trigger fresh buying by FIIs / DIs / Retail Investors and Traders?
Leading to a fresh momentum to reach 200DMA at 5645
b) Will market pundits after dissecting, between the lines, come to a
Conclusion the ‘Futileness’ of budget leading to nervous ness so that
Markets once again take a pre budget path and gravitate under the Pressure
And Fears of Rate hike, Inflation and Geo political tensions and Oil prices
c) Market will move in a range of 5300/5500 to consolidate for some time
till fresh event , either global or national, gives fresh impetus to move
In new range, high or low,
All this will take some time, once the dust settles down markets will give
Some clues
Till that time one has to wait and carry on with technicals of the market
Watch the levels
Upward: 5402/5480/5515/5557
Downward: 5262/5200/5170/5115
Technical View
Pivot For Nifty: 5372
Significance
Pivot is above the close of last (28th Feb.) trading day
Indicating its importance, if Nifty remains above that
It will attempt to test higher levels, any time in few sessions
R1 (First resistance) is @ 5437
R2 (Second resistance) is @ 5541
R3 (Third resistance) is @ 5606
Significance
The gap between R1 (5437) and last days high 5477 is very
Significant, Nifty may move above R1 but will face stiff
Resistance at 5477
R2 (5541) will be difficult to achieve as there are number of
Clusters of resistances like 5480/5515
Long traders are advised to book profits at 5515 and wait for
5557 to be crossed.
Short traders should create positions above 5437 with a stop at
5480 and carry trades till 5225/5200
S1 (First support) is @ 5268
S2 (Second support) is @ 5203
S3 (Third support) is @ 5099
Significance
For short term market is in positive bias so resistances are important
Than supports
S1 (5268) and last closing at 5333 should be treated as ‘No man’s land’
If Nifty trades below 5262 then fresh shorts can be created with a stop at
5380/5402
Any close below S2 (5203) will signal much lower levels like
5177/5115/5060
VXI (Volatility Index)
It was expected to be very active during the budget speech
It has been on rise for last trading sessions. Now as the events
have gone by , it will reduce. If there is significant drop
in volatility markets will move in a range with breakout
on either sides
DMAs(Day Moving Average)
20DMA@5401
50DMA@5678
200DMA@5645
Significance
Market is trading below 5/20 DMA levels. Unless 20 DMA (5401)
Is crossed on ‘Closing’ basis markets will remain under bear pressure
Once 20DMA is crossed then short term trend becomes ‘positive’ and
Nifty may try to take further resistances at 5480/5515
For a complete turnaround Nifty has to cross 5603 and 200DMA at
5645
COMMENTS
Market participants were extremely cautious prior to the announcement of the
Budget, and feared a tough budget. The Finance Minister did not announce
any new tax or duty, which along with a plan to contain rising inflation
and fiscal deficit, gave a reason to ‘Cover Shorts’ and/or buy fresh. This took
Nifty to rise 100 point, Nifty crossed 5400 and at one time reached above
Significant a level of 5450(5477). But as markets closed with minor gains
The Nifty has not made the move very clear right now, it looked like it
was about to start a nice intermediate uptrend for which it needs to cross
200DMA (5645). It came within 150 points of it but it has done a
'Summer Salt back to 'Square One’ position,
If one has to go by technical view Nifty may bounce back to move
Beyond 5600 within next month or so. Bear in mind , if we do make
A new low ,all the above analysis will go for toss. Traders are advised
To wait and watch for next few sessions till clear trend emerge
Till that time
The best strategy is
Use intra day momentum for trade
Have minimal exposure in a day
Book early profit or loss
Keep small targets and stop loss
Invest in large caps which have fallen by
30to40% for long term in small trenches
Stock Specific
L&T Polaris
BHEL NIIT Tech.
ICICI Bank Glenmark
AXIS Bank ITC
BOB Crompton
CANARA Bank Hindalco
Infosys Ranbaxy
Crompton Sterlite
Bharti Maruti suzuki
Some of the companies can be considered for Investment buy
In small installments at every fall
GMR Infra Indusind Bank
V-Guard Saw Pipe
Yes Bank Lanco infra
Ramkey Infra IDFC
Aditya Birla Sujana Towers
EMCO Celestial Lab
Elecon Eng Arvind
Suryalata Spinning Sintex Ind.
Artson Eng.
Geodesic Techpro systems
Gateway Distripark Camphor and allied
Impressions
Tere is really nothing much to be excited about in the budget –
which Is first reaction as well.It was a a passing event having
minimal effect on markets , for traders and investors most
satisfying thing is ‘It was harmless’
Nifty is at a crucial juncture now. What happens next is difficult
To predict at this time as it could go either ways from here. Long
Nifty looks in down trend while near term things look promissing
Thanks
Dr. Vasant Bele
All the views are personal. Invest after consulting experts
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