Running Ahead (of fundamentals)

Dear Investors

March started with a bang on ‘Dalal Street’ Nifty and Sensex opened with an

Upward move crossing 18000 sensex and Nifty crossed 5500. Healthy global cues

And some budgetary provisions like ‘Lower fiscal Deficit’, Mutual funds allowed to

 Rope FIIs, No change in Excise Duty on automobile etc, led to short covering and

 some fresh buying by FII and domestic cash rich retailers led the 'frenzy in market’,which looks without any change in 'Fundamentals'

leading to highest one day gains in Sensex and Nifty  in last 22months. This was

across the sectors. Number of stocks ‘Skyrocketed’ in volume and prices

Nifty gained 189 points to close at 5522

Sensex gained 623 points to close at 18447

The ‘Pre Budget’ mood of the market was totally altered ‘Post Budget’ leading to

‘Buoyancy’, all the day, leading to high turnover in both cash and F&O segment

What Next (Cautiously Optimistic)

Nifty has crossed first hurdle of 5500 successfully on closing basis. Now it is to

Be seen whether the gains can sustain to keep moving towards two significant levels

5557/ 5600. There will be a stiff resistance at 5595(previous top), if cleared on closing

Basis then the target will 200DMA at 5649.

So one has to watch

Upward Levels: 5557 /5599/ 5649

Downward Levels: 5480/5380/5330

There is every chance that traders will book profits above closing levels and near 5595

Profit booking should not take Nifty below 5380/5449 levels.

 All depends on ‘Global Situation’ and Oil prices ‘Oil’ may ‘Spoil’ the game.

Traders and Investors should not get carried away till 200DMA (5649) is taken away

On closing basis and with high volumes. Market may consolidate in an upper range

5380/5515 and the move depending on local and global factors(oil, Geopolitical tensions

US data, Inflation, interest rates, oil price hike in India etc.) Though there is sentimental

Change , there is no big ‘Structural’ change in last two days.

All market participants should take the rise with caution. (There is one thing to be taken

 care of, This is the beginning of the March settlement, this series is longer one,

There is every chance that, the present rally is positional one, by F& O traders and

Speculators without much cash base buying)

Technical View

Pivot for nifty: 5476

R1 (First resistance)is @ 5579

R2 (Second resistance) is @ 5636

R3 (Third resistance) is @ 5739.

Significance

Any close below Pivot (5476) will change the course of present

 Uptrend , all long positions should have immediate stop loss at the

Pivotal level

R1 (5579) will be immediate resistance above which market will test

 The previous high, 5595.

Short traders can create shorts at this level with a stop at 5600, there

will be selling pressure at 5557, which is the stiff resistance level

R2 (5636) any close above this will take Nifty above 200DMA in

a flash and close above 200DMA will be encouraging for bulls to

carry longs up to 5700

S1 (First support) is @ 5419

S2 (Second support0 is @ 5316

S3 (Third support) is@ 5259

Significance

Once the Pivotal value is taken out during fall then there is very

 high Possibility that Nifty will gravitate to S1(5419) which will

 be a strong support for ongoing up trend, so all the stop loss

should be placed by long traders at this level

S2 (5316) below this the present rally will be threatened and all

Positions should be covered and fresh shorts can be created

S3 (5259) will signify end of the present ‘Bear market rally’ in

down trend

.VXI (Volatility Index)

The striking fact about this up serge was minimum volatility

If the trend remains like that market may consolidate in a range,

5500/5380, WHICH WILL BE GOOD SIGN FOR BULLS

DMAs (Day moving average)

5DMA@5372
20DMA@5406
50DMA@5669
200DMA@5648

Significance

Market is well above 5/20 DMA indicating ‘Bull strength’ Most

Significant part is 50/200DMA are very close to each other

Indicating that any move above 5595(previous top) will

clear both the averages  and move above

Target for the current rally has to be at 5600 and any move above

5600 should be used to book profits as there will be lot of selling

At and around 200DMA.

COMMENTS

 Structurally there is no change in ‘Ground Realities’ or ‘Fundamentals’

So as to take markets to new higher levels, that to without ‘consolidating’

At upper range, it is advisable to be some what skeptical about this rally

 than getting in to ‘frenzy’. Once Nifty moves above 200DMA on closing

basis then fresh longs can be built till that time all upper levels should

be used to book profits and wait for further indicators.

Traders and investors are advised to USE MOMENTUM, HAVE

SMALLER POSITIONS ON EITHER SIDE, WITH STOP LOSS.

EXIT WITH LITTLE PROFIT/LOSS.

WATCH THEMARKET MOVEMENTS AND USE ALL FALLS

TO PICK LARGE CAP OR GOOD MID CAPS AT LOWER LEVELS

FROM INVESTMENT ANGLE ONLY

Stock Specific

ICICI Bank                   Indisind Bank

L&T                               M&M

CROMPTON                Sterlite

ITC                                DABUR

THERMAX

Camlin                         Litaka Lharma

Balsaro Alloys             Artson Eng.

 Value Ind                    Yes Bank

Andhra Bank                Compuage Info

Sterlite Tech.                 Celestial Lab

Tutis Tech.                    Sumeet Ind.

Kabra Extrusion            Sujana Towers

Camphor and allied      Ador Fontech

Tilak nagar Ind             Globus Spirit

IMPRESSION

Present rally is a ‘Pleasant Surprise’ all those who are stuck

 at higher levels have good chance to get out..

Do not be

OVERAMBITIOUS, be cautious because

 'Oil may Spoil' the game, 

Watch the oil move,

Global markets were not in good health yesterday

Thanks

Dr. Vasant Bele

All the views are personal, invest after consulting experts