DUBIOUS (Hesitating) moves

                                                   Dear Investors

 

On Tuesday markets opened flat at 5466(Pr. Close 5463) and

Moved to higher level in early part of the trade. There was no

Bad news was the ‘good news’ for ‘Bulls’ to take charge of

The trade. Oil was cool, DMK/UPA were across the table and

Also Libyans were in a mood to sit with UN representatives

All this created a conducive environment to trade long, Nifty

Moved upward in small bouts to the level of 5530 to close at

5520

All this was fine except the volumes were meager (1, 03000) and

Advance/ Decline ratio was 2:1 all this appears to be ‘DUBIOUS’

If compared to the level where Nifty has reached

There was no FII /DII buying and prices moved in ‘Beaten down’

Stocks and sectors, making it more suspicious, tentative and

 hesitant.

Market levels on Tuesday:

Nifty: High: 5530, Low: 5464, Close: 5520

Sensex: High: 18466, Low: 18266, Close: 18439

What Next

Market was in ‘a good mood’ as there was no bad news in offing,

After opening on a flat note it steadily went on adding to Nifty

To reach an important level of 5530(40 DMA@5532 and

40 Exponential @5547) which will act as an important

 Resistance level tomorrow. To maintain up ward move intact

Nifty has to cross 5557/5580 levels with volume. If Nifty does

Not sustain these levels then it will slide back to important

Support at 5480/5449

Once these hurdles are cleared Nifty will face resistance at 5612

(200 Exponential DMA).

All this depends on, how DMK/UPA behave than Nifty, where

Oil price moves and what happens to the peace process in Libya?

Bulls have taken a good start but finish looks difficult. Hope it may

Not ‘Abort Prematurely’

The good parts of the trade were

Markets sustained above 5480 on closing basis and maintained

The gains to close above 5500

But………..

Total, cash and F&O volume was not satisfactory on a day when

Nifty has moved substantially, so also it was not a broad base move

Indicated by poor Advance/ Decline ratio of 2:1

There was predominant movements in ‘Hammered sectors’ like

Infra/ Cap goods /Reality, without much change in ground reality,

Making this up move ‘suspicious’. It has to be seen how Nifty

Moves tomorrow, till that time keep your ‘fingers crossed’

Levels to watch

UPWARD: 5530/5599/5630

DOWNWARD: 5480/5421/5380

Technical view

Pivot For Nifty: 5504

R1 (First resistance) is @ 5545

R2 (Second resistance) is @ 5570

R3 (Third resistance) is @ 5611

Significance

Nifty has closed above Pivot (5504) at 5520 which is a good

Sign for long traders. Now is the real test of bulls. It has to be

Seen if Nifty moves above R2 (55700 to test previous high

5608 and close above that.

All long positions should be carried up to 5600 and covered

Around it

Beyond 5600 no fresh longs should be created till Nifty gets pass

5611/ 5630 on closing basis 5600/ 5630 will have selling pressure

Adventurous bears can create fresh shorts at and around 5599/5600

And carry with a stop loss at 5656 on closing basis

S1 (First support) is @ 5479

S2 (Second support) is @ 5438

S3 (Third support) is @ 5413

Significance

S1(5479) should be immediate stop loss for all the long positions

Any close below S2(5438) will indicate end of the current up move

Bears can create shorts below5479 with a stop at 5505 and

Carry till 5380

All falls below 5438 can be utilized by Long-term investors

To do fresh buying for long term portfolio building

VXI (Volatility index)

There was great reduction in volatility in Tuesday’s trade.

As we start moving towards 5600 volatility may rise due

to selling pressure.

DMAs( Day moving average)

5 DMA @ 5478        (sensex 18293)

20DMA @ 5415       (sensex 18090)

40 DMA @ 5532     (sensex 18465)

50 DMA @ 5630      (sensex 18828)

200 DMA @ 5656    (sensex 18844)

Significance

As market /Nifty is trading above short term DMAs95and 20)

There is very little risk of immediate down move.

As Nifty has moved above 5515 40DMA at 5532 becomes

 A vital level for the bulls, any close above this will open

Possibilities of Nifty moving toward 200DMA at 5656

Short term ‘short traders can create short positions around

40DMA at 5532 with a stop loss at  5580 / 5608

COMMENTS

Tuesday’s close has created the possibility of short term up move

Leading to 5600. Once this is taken out on closing basis, Nifty

Will have next target as 5656 and 5760.All depends on Geo-

Political situation in and out side India.

The real question is not ‘Whether Nifty will test 5600/5656’but

Will it sustain it ? is the real problem. All the upward rallies

Are without FII/DII and retail participation (probably speculative)

And with low volumes.

Genuine traders and Investors should guard their positions with

Strict stop losses. Investors should use dips to buy and exit at

Highs .

Form last few day’s trading pattern it looks we are headed high.

Nifty has formed higher bottoms and higher tops during last

 Few weeks so do not go against the trend, just ride it.

Note of Caution :( If Libyan problem as well as DMK/UPA

Problem get settled, over night, equations might change, so

Trade safe)

Stock Specific

ICICI Bank

RIL

M&M

Infosys

Sterlite

Bharti

NTPC

ITC

SAIL and

 Dr Reddy’s lab

These can be traded intra day with stop loss

Fortis Health at 153

GMDC at 122

Artson Eng. At 50

Jindal Polyfilm   at 431

IFCI at 54

BILT at 31

Sumeet Ind. At 29

Central Bank at 155

Polaris   at 190

Rolta at 148

Hexaware at 54

GATI at 57

Deodesic at 84

Strelite Tech at 48

 Mid and Small cap stocks can be bought at all dips and

 Carried as long term investments

 IMPRESSION

 HEADING HIGH  WITH CAUTION

Thanks

Dr. Vasant Bele

All the views are personal , invest after experts opinion

Written and Posted on 8th March 11 at 10:45 pm)