Dear Investors
Sixth session of relentless rally in stock market has kept
Investors, traders and analysts puzzled, Market has been in
A ‘bottom up’ position, 5200 has gone, 5300, 5400, 5500 5600
Too have gone we are at 5700 and still no signs of ‘fatigue’.
Markets have gone past caution, exuberance and euphoria,
It’s in a stunning speed and swing. Nifty opened flat and lost
Few points in the opening trade, but the ‘charged bulls’ never
Let it go down during the day. Nifty wiped out 5700 with an
Ease to go ahead and test important resistance of 5760.
FII buying and short covering helped Nifty to reach the top
Of 5770.In closing hours, profit booking brought it down to
5736. Still well above 5700.
Today’s levels
Nifty: Open: 5686, High: 5680 Close: 5736
Sensex: Open: 18949, High: 19226, Low: 18944, Close: 19120
Volatility index: Open: 21.2, High: 22.19, Low: 20.37, Close: 21.2
What Next
Traders and speculators should keep strict stop loss for all the
Trades at the nearest resistance and support levels
As we are approaching expiry, there will be lot of volatility
During the day trades
.It is better to avoid long term investments till we get a
Substantial correction while we are heading for the 'TOP'
One must keep in mind that it may be at an 'EDGE' of a fall
Nifty may correct 100 to 150 points to take support at
5595/5565 levels
The upside is at the most up to 5790/5818,
It is advisable to avoid to buying at higher levels , say
Beyond 5790, all trades should be with stops.
Watch the levels of
UPWARD: 5790/5801/5818
DOWNWARD: 5720/5688/5630
Technical View
Pivot For Nifty: 5728
R1 (First resistance) @ 5777(19249)
R2 (Second resistance) @ 5818(19378)
R3 (Third resistance) @ 5867(19531)
Significance
R1 (5777) is the top on Tuesday (5770), indicating
That there is lot of selling pressure in the zone of
5780/5801
Close above R2(5818) will take Nifty to a new territory
Of 5790/5880/5900
All long trades should be partially booked at 5800
and carried with a stop at 5691(200DMA)
No shorts till we are below R1(5777)
S1(First Support) @5687(18967)
S2(Second support) @ 5638(18814)
S3(Third support) @ 5597(18658)
Significance
S1 (5687) is placed nearer to the 200DMA @ 5691,
Signifying its importance, any close below this will
Be a first indication of setting in a correction, so
All the long trades should have a stop at and below
It at S2 (5638).
Any fall below S3 (5597) will indicate, termination of the
Rally, because it is placed nearer to the 200Day Exp.
Average at 5587
So traders and speculators should watch these levels
Than going with resistance levels
VXI (Volatility Index)
Pivot @21.25
R1:22.13/R2:23.07/R3:23.95
S1:20/S2:19/S3:18(Rounded)
Significance
Movements of VXI indicate that we are in a
Rising volatility period, VXI beyond 22/23
Is not good for an up trend, traders should be carefull
During the day and guard all the positions with stop
Loss. Fresh buying is not recommended.
DMAs(Day Moving Average)
5DMA@ 5551(18460)
20DMA @ 5491(18309)
40DMA @ 5450(18181)
50DMA @ 5493(18326)
200DMA @ 5691(18958)
50 Day Exponential @ 5553(18523)
200 Day Exponential @5587(18632)
Significance
Market is above all the short/long term moving averages,
Indicative of a bullish ness in the market.
As we proceed towards new levels one has to keep
Watch at 200Day simple and Exponential averages
For reversal of the trend. As long as the indices are
Above those, one can keep long positions on, with a
Stop loss at 200Day simple average @ 5691 as a
First signal of change in the short term trend
No fresh long term buying is advisable at higher
Levels.
COMMENTS
Wait and watch is the mantra, Trading in such a situation is
Risky, it has become a game of 20:20, no body knows the
Winner on that day. Those with weak heart should not trade
We are approaching a zone of ‘High Risk’.’ Low reward’
Nifty is entering in an area of multiple resistances.
One has to take in to consideration few points
Nifty has moved around 600 points from low and Sensex 1300
Points from the low, all this rise was without any correction.
The rally is not broad base, Mid cap stocks have not moved
During this rally
This rally is at an year end and expiry period
Volumes in F&O were high s compared to cash indicating
That there was hardly any delivery base buying
FIIs were net buyers but DII buying was not significant
Retail participation have feeling of ‘Left out’ of the rally
,It was with an unnatural speed
This rally was on the backdrop of number of ‘Nigetive
Events ‘ and ‘News’ in and around us
All this creates doubts about sustainability of this rally.
Still one has to go by the trend, no contrarian actions
Please.
Exersise caution at higher levels and try to book part
Profits at every rise.
IMPRESSION
VERTIGO
Stock Specific
Long trades with strict stop loss are advised in
RIL
ICICI Bank
M&M
L&T
Bharti
Rel. Com
SAIL
Sterlite
Canara Bank
BOB
LIC Housing Finance
EMCO
Geodesic
Delta corp
Polaris
Mphasis
Hexaware
UCO Bank
Andhra Bank
BILT
KSK Energy
ELGI Equipment
Investors are advised to wait for long term
Buying.
Thanks
Dr. Vasant Bele
All the views are personal, invest after consulting experts
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