Market for Monday
Dear Investors
Friday was a day of ‘Rise and Fall’ of the markets.Nifty opened
with a substantial gap and moved up till the news of ‘unrest’ in
some additional oil producing countries dashed to Indian market.
After testing important resisatnce at 5608 Nifty moved back sharply
To test lower levels of 5524 and ultimately closed low at 5538
(sensex High: 18736 Low:18448/close:18486)
While writing this ‘post’ all the Fridays trade has become a ‘Sweet Past’
as lot of events have occurred after the close of trades on Friday.
Additional unrest in oil producing countries including Saudi along with
Resistance, level of 103/104 $/ Barrel. Any rise above this will take it to
107$ and above.
All the international markets, mainly US are down (Irrespective of
The improvement in Jobless claim0 is down because of ‘oil shock’
And worst of all
Indian political situation has become ‘Fragile’ due to DMK party’s
Stand of exiting central cabinet by the ministers and supporting from
Out side
All in all…………..
Burdon of different events and hurdles are not allowing Indian markets to
Raise its head beyond certain levels and has put investors and traders in
‘A tight spot’
What Next
With given situation, it is any body’s guess where the markets will open
Monday morning. (Unless there is some solution to political problem
During the period of,’writing and reading’ of this article by the readers
Occur) it is expected that it will be ‘A down day’, only thing to be seen is
‘How far down’? Here technicals can give some help to project.
Watch the levels
UPWARD: 5557/5600/5629
DOWNWARD: 5480/5400/5380
Technical View
Pivot for Nifty: 5556
R1(First resistance) is @ 5589
R2(Second resistance) is @ 5640
R3(Third resistance ) is @ 5673
Significance
In a given situation it will be observed if Nifty can remain in the
Vicinity of Pivot( 5556) this will be very vital for market as far
as its up move is concerned.
R3(5640) will be well above 200 Exponential DMA but below
200 Simple DMA, If Nifty manages to negotiate this then there
Will be a change in perspective of market(which looks difficult
to me in a given situation)
S1(First support) is @ 5505
S2(Second support) is @ 5472
S3(Third support) is @ 5421
Significance
For a give day , supports are of prime importance
Break below S1(5505) will cause precipitate fall to
S2(5472) level. For markets to remain in up move
5449/ 5472 are important supports. Any close below
S3(5421) will open doors for a fresh down move
VXI(Volatility Index)
(For all interested readers: volatility refers to the amount of uncertainty or
risk about the size of changes in a stock’s'/ Index value. A higher volatility
means that a stock's value can potentially be spread out over a larger range
of values. This means that the price of the stock can change dramatically
over a short time period in either direction. A lower volatility means that a
stock's value does not fluctuate dramatically, but changes in value at a
steady pace over a period of time. Index of volatility is a mathematical
calculation of this move).
Pivot is at: 22.57
As mentioned above it is the measure of uncertainty of movements
in market. Considering the events before Monday it is likely that
It will create lot of volatility
DMAs(Day moving averages)
(For Interested readers:
It is an indicator frequently used in technical analysis showing the
Average value of a stock or index over a set of period. Moving
Averages are generally used to measure momentum and define areas of
Possible support and resistance)
5DMA @5371
20DMA @ 5406
40DMA @ 5575
50DMA @ 5669
200DMA @ 5647
Significance
Nifty is trading above 5 and 20 DMAs indicating that the in short
term market is in an up move, simultaneously this will act as
important support during down move , any close below 20DMA
will indicate a fresh down move.
40DMA is a strong resistance for the up move, close above it will
Be a positive signal. Fresh long positions can be created above this
While all short positions must be covered.
Any close above 200DMA will be trend changer
(For Intrested readers:
Long (or Long Position) Mean? The buying of a security such
as a stock, index, with the expectation that the asset
will rise in value.
Short (or Short Position) Mean? The sale of a borrowed stock,
Or index with the expectation that the asset will fall in value)
COMMENTS
Though it was a best weekly close in last 4 months, the close on
Friday Was not encouraging one.5557/5600 and 5647 levels are
Giving stiff resistance for last few trading sessions. Unless 5600
Is taken out on closing basis consistently with high volume market
Will not move upwards.If 5600 can not be sustained (in given
Situation, it looks difficult) market will gravitate to the lower supports
At 5505/5480/5421. Any close below 5420 will open doors for a
Fresh down trend towards, 5330/5280.
Though technically market looked ‘ok’ events, incidences and sense
Is not allowing it to, proceed further. Market requires some ‘Period
Of calm,’ to consolidate in a range.
Traders and speculators are advised to keep away from market till
All the dust settles
Investors can use ‘panic falls’ picking good companies in small lots.
Over all it is suggested to,’ Observe-get Oriented-Decide and Act’
Let Monday be a ‘Blank Day’ in your ‘Books of trade’
No stock specific,
IMPRESSION
(Read ‘Weekly markets’ as a separate article)
Thanks
Dr. Vasant Bele
All views are personal, invest after consulting experts
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