Dear Investors
Indian equity markets started on nervous note, Nifty opened with
A down ward level on the backdrop of profit booking. during early
trades Nifty crashed to lower levels and became nervous as the crude
kept moving higher levels, there was steep fall to the level of 5468 .
All the nervous ness was washed by the news ‘Gaddafi Has agreed
for compromised formula’ the news took Nifty beyond resistance
at 5570 (Resistance at 5557) and with good volume, News that there
were gun fire at ‘Oil Fields’ in Berga led a steep fall in the markets .
All the moves were volatile and made traders nervous, at the end
Nifty closed in green but in ‘Jittery’ mood.
What Next
Amidst the conflicting reports on ‘Libyan Situation’ and Peace process
Crude and Nifty fluctuated all the day, ultimately settled in Green.
Though domestic events like, budget is over, PM has accepted
Supreme courts decision regarding appointment of Mr.Thomas(as CVC)
Petroleum ministry took soft stance on Carin deal etc…are over,
. Inflation fears are subsiding, there was some buying by FIIs,
Now there are no major events in sight, still the question is …..
Would traders and investors go out and aggressively buy or go short at
the current juncture?—It is very difficult to say. It really depends on
the global picture rather than the domestic picture which actually looks
to be improving. Unfortunately, for the next few days at least
, the markets probably will go up or down based on global factors.
So for an average trader, he has to do 'perfect balancing' Levels to watch
UPWARD 5557/5599/5620
DOWNWARD: 5480/5420/5380
Today Nifty crossed the first resistance 5557 but could not sustain it
Leading to close at and around 5515(5522) which is important supprt
Now it is to be seen whether pulls back below 5420 or trades higher
At and around 5599 (previous high). In shart term the trend looks up
Indicating Nifty may test 5600/5625(Exponential 200DMA). Any
Rise above 5600 will be tested by heavy selling. Nifty has a strong
Support at 5380. So the range will be 5400-5600
Technical View
PIVOT FOR NIFTY: 5524
R1 (First resistance) is @ 5581
R2 (Second resistance) is @ 5626
R3 (Third resistance0 is @ 5739
Significance
Nifty has closed around Pivot indicating that the up trend is intact
Any intra day fall can be bought with a stop loss at 5449.
R2 (5626) is placed at 200 Day Exponential Moving Average
There is every possibility that it will induce heavy selling by
Traders and short sellers. If 200DMA (simple) at 5651 is taken out
With volumes, Nifty will trade in ‘Long Territory
S1 (First support0 is @ 5419
S2 (Second support) is @ 5316
S3 (Third support) is @ 5259
Significance
As the short term bias is upward one has to observe
stop losses sincerely, in volatile market support
levels are significant to limit losses
S1(5419) now is the level above which current up
move will be maintained, any close below S2(5316)
will signal change of trend on downward side
VXI(Volatility Index)
Pivot is @ 22.94
There was increased volatility in yesterday’s trade, so will
Be in coming days because market moves are ‘News base’
DMAs(Day moving average)
5DMA 5392
20DMA 5411
50DMA 5660
200DMA 5651
Significance
We are trading above 5/20 DMA indicating short term trend
is up
There will be lot of selling at 200DMA. Once it is taken out
on closing basis , market will test 5700
Short sellers can create positions at 5620 and watch 200DMA
As a stop loss
Long traders can carry positions up to 5625 with a stop los at
20 DMA(5411)
COMMENTS
Looking at the news base volatility one has to keep his
‘fingers crossed’
As far as intra day moves in market are concerned. One
thing looks certain that markets, in short term are in an
upward bias. Presonally I feel that market will try to test
previous top 5599/5600 from where it my slide back to the l
levels of 5449/5515. If these levels are sustained the there
will be one more attempt to test the 200DMA at 5651.
Investors and traders should exercise caution at these levels
As there will be lot of selling and volitality at these levels.
In given situation 5330 will be a strong support and marke
Will consolidate in a range 5330-5595
Traders and investors are advised not go against existing
Trend, carry the trades with stop loss and in small quantity
Long term investors should do ‘bottom fishing’ at lower
Levels in large cap stocks and good mid caps too.
Stock Specific
RIL
ICICI Bank
Canara Bank
M&M
Sterlite
Tisco
Hindalco
Suzlon
Moser bear
Polaris
Tutis Tec
Yes Bank
Indusind Bank
Central Bank Of India
Petronet LNG
Glenmark
Biocon
Jyothi Lab
Celestial Lab
Litaka Pharma
Value Indutry
Sumeet Industry
Artson Eng.
Ador Fontech
Camphor and Allied
Kabra Extrusion
EMCO
Elecon Eng.
Impressions
Markets are in a mood to ‘go up’ with one leg
on ‘volatility’ other on ‘Oil’, one has to watch that
It does not ‘Slip’ be cautious
Thanks
Dr. Vasant Bele
All the views are personal ,invest after consulting experts
Special Note;Why levels are given:
(While posting daily letters on Blog I have been following certain pattern
Like Resistance levels, Support levels, retracement levels, Day moving average levels
and at times profit booking and short covering levels. You must be wondering, why
levels and not specific Number, Are they really significant from day to day or long
term angle? And so on…………….
The answer is
For any one and every one it is difficult, rather impossible to predict market moves
Perfectly for a given period of time no statical data can do that, if so, how to trade in
markets? is the main question Second thing is every trader has got his own perception
regarding booking profit or loss, in such conditions these levels will help traders to
decide when to enter or exit markets. For example Day traders will have shorter
range while positional traders may prolong the trade with in the given range.
Traders are always advised to plan their entry and exit with reference to the level.
Whenever Levels are denoted it is not the only a point but the spread between
the points is importan,t so it is the spread that is important than a specific point. The
spread helps different individuals to act at different points within the given level
depending on his risk profile. There are number of traders who have predetermined
point of profit booking or loss bearing, these levels of Resistance and support or
price target zones can help them in deciding at the time of entry. Simultaneously
it helps in deciding ‘stop loss or Profit booking’ targets at entry level.
This is important during volatile periods or periods of excessive or very
low volume days
Here if you are pr-decided as far as your targets, you can wait till it is achieved.
Otherwise without levels it will be like ‘shooting in the dark without a target.
pre prescribed levels, help traders to plan his trades day or days before
market, helps traders to trim losses or manage profits
You can label this as ‘Level Play’ in stock markets, not an arbitrary playing the market
DMAs(Day moving averages)
These are important for longer players, say positional trader who plan their trades
for more than 5/10 days. 5/20 day moving averages help these traders to carry on
trades in most volatile periods without getting panic , unless their levels are achieved
or broken
Same is the case for 50/200 day moving averages , long term investors can plan their
Sells and purchases depending on where the level is in relation to DMA
So all these level knowledge helps traders and investors to plan their market movements
So as to be profitable, which is the main aim for every one? Arbitrary moves always lead
to loss making and confusion so try to master playing within the levels or spreads
Thanks)
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