Dear Investors
On Wednesday Nifty closed on a firm note. Nifty opened
With a small ‘Gap Up’ and went on adding all the day.
Cooling of oil prices and conscientious opinion of Experts that RBI will not increase Rate BEYOND 25 bps
Took Nifty to important resistance level at 5535 to cool
Off at the end at 5511, well above 5500. The low was
At 5475 (support at 5480)
Levels during Day:
Open: 5475/close:5511
High: 5535/Low:5475
What Next?
Today (Wednesday) was a day of ‘Show of Strength’ by Bulls.
Right from the start of trading prices moved in an upward
Trajectory, helped by RIL/Banks/Autos and to some extent
IT and bounce in Japanese market after yesterday’s fall.
Cooling of oil prices encouraged bulls, though at the end
some disturbances in Bahrain
Away the gains to close Nifty above 5500 (5511)
Nifty is heading towards next important resistance level
Of 5567(50Day Expon. Average is at 5567) which if crossed,
on closing basis with volumes, next technical and sentimental
target will be 200 Exponential DMA at 5502 and 200DMA(simple)
at 5569
All looks rosy on paper but there are number of hurdles
For Fifty’s journey towards 200DMA (5669)
All depends on
A) RBI policy:
1) Change in rates, CRR, SLR, REPO etc
2) Language of the RBI statement
3) Predictions of GDP/Inflation and
B) Oil Prices:
What happens to OIL prices in coming days?
According to technical view, present fall in
Oil price is a temporary correction in an upward
Trend, it is expected to rise after, taking support
At 92/95 level, to higher levels of 107/110.
C) Disturbance In Middle East
There were some disturbances in Bahrain’ leading
To clamping of ‘Emergency and Firing’ by army, it
Has to be seen how this affects the tension in
Other part of oil producing areas.Moody has down
graded Egypt rating as well as Portugal's
rating
graded Egypt rating as well as Portugal's
rating
So let us hope OIL or RBI will not play a ‘Spoil Sport’
Low volume trade was one more worry of day’s trade
Indicating some caution
Of growth and expectation of Inflation coming downIn coming weeks ….. Market will take it as a booster
Dose and will rally towards 200DMA.
Anything different than this along with oil getting
In to higher levels will create a fresh selling pressure
Leading to lower levels
So one has to be, ‘cautiously bullish’ till RBI policy is out.
All is not well on International front
Keeping all these factors in view one should watch the
Levels
UPWARD: 5567/5602/5669
DOWNWARD: 5480/5400/5380
Technical View
Pivot for Nifty: 5507
R1(First resistance ) is @ 5506 (sensex:18361)
R2(Second resistance) is @ 5563(sensex:18546)
R3(Third resistance) is @ 5630(sensex:18767)
Significance
R1(5506) will be a short term support while any
Close above R2(5563) will lead to higher levels .
Short traders should keep stop loss at R2(5563)
While fresh longs can be created above R2
S1(First support) is @ 5382(sensex:17955)
S2(Second support) is @ 5315(sensex:17734)
S3(Third support) is @ 5258(sensex:17549)
Significance
In an upward trending market one has to watch
Support levels than resistance levels carefully.
S1 (5382) will be the first signal of change in
Short term trend. Any close below S2(5315) will
Indicate a bearish reversal leading to immediate
Support at 5200/5177 lows
So all long trades should be with a stop at 5400
And 5371( low on Tuesday)
VXI (Volatility Index)
Pivot is at: 26.80
Pivotal value is well above 24 indicating a high
Degree of volatility. Unless volatility comes down
Nifty will not settle in a range or consolidate.
DMAs(Day moving averages)
5DMA @ 5504(sensex: 18370)
20DMA @ 5466(sensex: 18263)
40DMA @ 5494(sensex: 18340)
50 DMA @ 5587(sensex: 18650)
200DMA @ 5669(sensex: 18889)
50 Exponential DMA @5568(sensex18583)
200 Exponential DMA @ 5604(sensex: 18689)
Significance
For a gross market trend (NOT FOR DAY TRADES)
Moving averages are more significant than Resistance
And support levels.
Exponential moving average is more specific than simple
Moving average, it is applicable to Stock as well as to
Indices.
In given situation 50 day exponential average is most
Important . If this is crossed on closing basis then Nifty
Will try to pierce through 200 day exponential average.
At 5604. 200DAM (5669) will be important for a long term
Trend, once taken out next level to watch will be 5760
COMMENTS
Recovering from the losses marked in the previous
session, Indian market posted better-than-expected
gains despite seeing crude oil prices mounting up.
Moreover, Japan
gains after witnessing a sharp downturn in the previous
sessions, which was caused by natural disasters and
nuclear explosions.
My view is that this rally is heading towards the area of
5567 where it is going to face major selling pressure.
Crossover and sustenance above this area can lead
this rally up to the mark of 5630-5669 range where its 200DMA
is placed. On the downward side market has got good support
at 5440 and below that 5380.
All this depends on two major factors RBI policy and OIL
Prices.
Considering the common sentiment about RBI policy, day
Traders can take positions in rate sensitive sectors like
Banking, Infrastructure Reality and Autos. All positions
Should be with stop lass at 5%
200 day exponential moving average at 5604 will attract
Selling pressure. Once we are above 5630/5669 level
Market will have a go at 5720
Stock Specific
ICICI Bank
Canara Bank
BOB
LIC Housing Finance
ITC
M&M
Ashok Leyland
BILT@33
Nelcast @ 90
Tube Investment @ 127
SHARP Ind
V Guard @ 160
NELCO @ 72
Amrutanjan @641
Piramal Life @ 85
Sunpharma Recent@76
EMCO @59
DENA Bank @98
UBI @ 101
Indusind Bank @246
Tutis tech @24
Sanjivani Parenterals @ 46
These are positional trades(5 to 10 days dependin on
Market conditions , can be converted in to long term
Buyes also)
IMPRESSIONS
CAUTIOUSLY BULLISH
Thanks
Dr. Vasant Bele
All the views are personal , invest after consulting experts
Written and posted at 11:00 pm on 16th March 2011
FLASH news: US Indices were down near 2011 lows.So
trade cautiously
trade cautiously
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