Dear Investors
Stock markets are going through a FRETFUL situation since
Last few weeks, Investors and traders are under great pressure
Of a series of events happening locally and globally, affecting
Emerging markets, in particular Indian Market.
Since last few weeks Markets are reeling under the pressure
Local Events like
Different scams
Inflation
Rising Interest rates
Slowing of Growth
Political Instability
Rising Commodity prices
Globally
Events in oil producing countries
Rising Crude oil Prices
Fluctuating US
Downgrading some European countries
And now
Earth quake and Tsunami in Japan
All these events are creating ‘Pressure’ effects on stock
Market Traders and investors across the world,
Only oasis was a Neutral Budget, whose effect was washed
Out by the events following it, and now we are back to
‘Square One’
What Next ?
On Friday Nifty could hold 5400 and bounce from there to
Close at 5445.Day’s high was 5502 and low was 5411.
Slowing of Industrial growth, Fear of rising Interest rates,
And Earth Quake in Japan
Friday’s closing below 5500 was with a fear of loosing
some more ground in coming days
In the light of events it looks difficult to predict the turn
markets will take in next few sessions and on Monday?
5380/5330 will be important supports for Nifty
Any close below 5330 will take Nifty back to the vital area
Of support, at 5200/5170. Nifty may open with a ‘Gap Down’
And take support at 5380, if not sustained then 5330 will be
level to watch.
To maintain an up ward move Nifty has to close above
5480/5505, all depends on ‘Overnight Events’ around the world
and Japan, in particular, till that time
Levels to Watch
UPWARD: 5480/5515/5567
DOWNWARD: 5400/5380/5330
In given conditions(when fundamentals are uncertain)
‘Technical data’ can give some help in predicting the
Direction of market. But not to the perfection.
Technical View
Pivot for Nifty: 5452(sensex18192)
R1 (First resistance) is @ 5494(sensex: 18322)
R2 (Second resistance) is @ 5543(sensex: 18497)
R3 (Third resistance) is @ 5585 (sensex: 18627)
Significance
Fridays close is nearer to the pivotal level indicating
That Nifty is at the lower end of the range. If Nifty does
not bounce up from here towards R1(5494)and starts
falling then we will be headed towards lower levels
during the day trade. Watch R1 (5494) carefully
Long traders should use Fridays low at 5411 as stop loss
Short traders can use Fridays top at 5505 as immediate
Stop loss
Any close above R3 (5585) will indicate a move towards
200 Exponential DMA at 5630 where selling pressure
May stop Nifty from moving to 5668(200 simple DMA)
Watch 5585 on up ward side
S1 (First support) is @ 5403 (sensex: 18017)
S2 (Second support) is @ 5365(sensex: 17887)
S3 (Third support) is @ 5312(sensex: 17712)
Significance
Any close below S1 (5403) or intra day move below that will
Signal weakness in markets. In such circumstances S2&S3
Will be taken out in a flash and we may move to next support
Level, 5200 and below.
In markets, governed by chain of bad events, supports are to be
Used judiciously while creating positions, other wise one may
Land in ‘Panic situation’ Keep strict stop loss for every trade
VXI (Volatility index)
As seen before since last few trading sessions volatility is
Very high (may be because of chain of events all over the
World) Volatility has become ‘The trend’ of market.
Volatility Index has good co relation to Nifty
VXI(Volatility Index) is consolidating between the
Levels of 22-28 so also Nifty in the range of 5380-5600
Any move away from 28 towards 30/35 range on VXI will
Create panic in Nifty and may start breaking down to the
Lower level, 5200. So watch for VXI
DMAs(Day moving averages)
5DMA@ 5509(18389)
20DMA @ 5444(18181)
40DMA 5510(18393)
50DMA@ 5611 (18730)
200DMA @5665(18875)
Significance
Immediate resistance is 5DMA (5505) and support is at 20DMA
(5444),
IN NEAR TERM, MOVE ON EITHER SIDE OF THE
TWO WILL DECIDE FATE OF MARKET
Close above 5611(50DMA) will take markets to new level
Of 5668/5760 .
COMMENTS
Market Status still remains Bearish. Chartically selling
Has over powered the bulls, If 5400 is violated with
Volumes we might see Nifty breaking down below the critical
Level of 5380 and 5330 region. In a broader sense as long as
Nifty remains below 5580/5608, it is clearly in a bearish zone
Even though Nifty manages to take out 5608, immediate
Resistance is at 5630 and 5668(200DMA), selling pressure
Will take Nifty back to the levels below 5600
So all your trades should be placed accordingly
Short Traders should keep stop loss at 5502 or create fresh
Short positions below 5330
Long traders should have stop loss placed at 5330 and
Carry trades up to 5580/5608
Long term INVESTORS should use all panic states
To buy large cap as well as Mid- cap stocks with a
View of 12 to 18 months.
It looks, on the basis of data from F&O and volumes
on Friday, As well as ‘Eventuality’ in place we are going
to test the lower levels in coming week/weeks
.Micro details of the market indicate that there is no
Fresh cash base buying, by FII/DII or Retails.
Majority of the trades are of speculative nature,
Once the eventuality is out of the way, markets will come
Back to its internals. So wait with optimism. Though short
Term is volatile and uncertain long term looks good.
Stock Specific
Traders should not open trades during first 60 minutes
Once the markets get stabilized at some levels one can
Have positions in
ICICI Bank
RIL
Infosus
TISCO
SAIL
Reliance Infra
LIC Housing Finance
M&M
Panic falls can be used to get in to
IPCA Lab@273
Hexaware @55
Polaris @188
Rolta @147
GATI @57
EMCO @60
Charterd Capital @55
Camphor and Allied @210
Herculis Hoiest @ 218
Arvind @56
Fortis Health@ 153
GMDC@ 122
Artson Eng.
Jindal Polyfilm at 431
IFCI @ 53
BILT @30
GATI @ 56
Geodesic@ 84
Strelite Tech @48
Ador Fontech@390
Gtaeway Distripark@ 112
Celestial Lab@ 30
Ramkey Infra @270
These are can be bought for positional trade
As well as from long term investment angle.
IMPRESSIONS
UNDER PRESSURE
hanks
Dr. Vasant Bele
All the views are personal, invest after consulting experts
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