HANGING (to fall) ?

Dear Investors

On Monday markets traded in very small range 5350/5400,

 And ended the day with a minor loss on Nifty and Sensex

It was oil which kept market sentiment depressed, Global

Markets were in an up move. Volume was not high.

Levels during the day:

Nifty: Open: 5408 / High: 5413 /low: 5348 / Close: 5364

Sensex: Open: 17984/High: 18007/Low: 17792/Close: 17839

What Next:

Market opened with a positive bias at 5408 but failed to

Maintain the gains, it was rising crude and unrest in Libya

Led to nervousness in market, Nifty took support at 5350and

Bounced back to test important resistance at 5400, to close at

5364 below support level at 5380, though Nifty has bounced

Back from 5350 it was unable to close above 5400 indicating

That market is ‘Hanging’ on weak supports to ‘Fall’ further

All depends on what happens in Middle East and African

Countries. Oil was steady at higher levels.

At the end of the trade, European markets as well as Dow

 Future were in green, giving some hopes of ‘Bounce’ in

Indian markets, when it opens on Tuesday

Investors were not willing to open fresh positions on either

Side, low volumes in cash market, indicate uncertenity.

One has to wait till definite trend emerges, till that time

Trade, ‘If you are a compulsory trader’, with caution and

Stop loss. All the long term investors should postpone

Their buying till there is some direction. It is not the market

To do long term ‘Quick Picks’

Watch the levels

UPWARD: 5402/5480/5505

DOWNWARD: 5330/5270/5177

Technical View

Pivot for Nifty at: 5374(sensex: 17879)

R1 (First resistance) is @ 5402(sensex: 17966)

R2 (Second resistance) is @ 5440(sensex: 18094)

R3 (Third resistance) is @ 5467(sensex: 18181)

Significance

Market has closed nearer to the pivot (5364).

Unless Nifty moves above R1 (5402) and R2 (5440)

And close there we are in a down move.

No fresh longs should be created till Nifty is above

R3 (5467) Short trades can be created at all the

Bounces, up to R3 (5467), with a stop loss at 5480.

S1 (First support) is @ 5337(sensex: 17751)

S2 (Second support) is @ 5310(sensex: 17664)

S3 (Third support) is @ 5272(sensex: 17536)

Significance

Any close below S1 (5337) will open a new lower range

 For Nifty 5330/5177

S1 (5310) and S3 (5272) are weak supports so do not

Trade long at these levels, wait till Nifty closes above

S1 (5337).

Do not create shorts at S1 (5337) wait till S2(4310)

VXI (Volatility index)

Pivot is at: 25.16

Significance

As long as VXI is above 24 markets will remain extremely

Volatile . VXI should settle at lower levels for markets (Nifty)

To bottom out. All trades should be with strict stop loss

DNMs(Day moving average)

5 DMA @ 5462(sensex: 18198)

20DMA @ 5457(sensex: 18216)

40 DMA@ 5471(SENSEX: 18259)

50 DMA @ 5533 (sensex: 18463)

200 DMA @ 5677(sensex: 18914)

50 Day Exponential Average@ 5546(Sx.18503)

200 Day Exponential Average @5594(Sx.18655)

Significance

 Day moving average is indicative of trend in the market

As long as Nifty/ Sensex are below 200Day Exponential

Moving average we are in a down trend.

In a down trend market will give intermittent rallies to

Test 5/40/50 DMAs.

Unlees 200 Day Simple average (5677) is taken out on

Closing basis one should not take it as a Trend Reversal.

Watch for 50 Day Exp. Average and 200 Day Exp. Average

 For a trend reversal

COMMENTS

Market is moving in a very tight range on low volumes.

Significant part is the Range has become narrower and

Has moved to lower valuations indicating a bearish trend.

There is selling at every bounce leading to ‘lower Top

And Lower bottoms’
 During last few weeks we were

Moving in different ranges like, 5903/6005, 5770/5903,

 5630/5770, 5565/5630, 5449/5565 and now we Nifty has

Shifted to a new range 5350/5450, all this is indicative

 Establishment of a near term down trend
. There are no true

 Bounces which will take Nifty above the top of the previous

Range. A close above 200 Day exponential average at 5594

Will probably be the first confirmation of a correction

 coming to an end, till that we will be at risk of testing

New lows
. It is better to enter in an established trend than

To trade in uncertainty, where you are likely to loose 9 out

Of 10 times.

How to trade in given circumstances?

Follow certain trading rules

       1) Do not trade for a given day

       2) Do not trade in first 30 minutes, wait till there is

           Till a definite trend is visible. No fresh trade in last 30

            Minutes

       3) Trade according to the trend

       4) Create short positions nearer the top of the range

           With a stop loss

       5) Buy longs nearer the low of trading range and

           Keep small targets of profit

       6) Do not carry positions for next trading sessions

       7) This is not the time for ‘Buy on dips’

       8) In such markets all rallies (Rise) should be used to

          Book profits or sell in9Its a seller’s market)

             9) It is not the market to do long term portfolio buying.

                  It’s a traders market, not investors

      10) Wait for consolidation to take place at some range

These are for day  trading, keep strict stop loss, or book

Quick profits, do not carry positions for next trading session

SAIL

Guj Ambuja

Sterlite

RIL

HUL

ITC

LUPIN

SUN Pharma

All these are positional trades (5 to 10 days)

Book profits at the earliest. Carry the trades

Depending on market direction. It is advisable

Not to keep long term investment positions till

Market consolidates.

Keep stop loss for positional trades also, Avoid

Averaging at lower levels

India Cement

Shree Cement

Prism Cement

Federal Mugal

Sanjivani Parenterals

HB Estate developer

EMCO

GMDC

Renuka Sugar

Rajashree Sugar

IDBI Bank

Tutis Tech

Celestial Lab

Ecoplast

IMPRESSION

WAITING FOR DIRECTION

 

Thanks

Dr. Vasant Bele

All the views are personal, invest after consulting experts

Note; Depending on Global markets, we may get

‘Ups and Downs’ in a day. Trade accordingly.