April 25th to 29th, 2011
Dear Investors
Indian stock markets were blessed in this week by
-Good Monsoon Forecast
-Buoyant Global Markets
-Good Earning expectations on the back of
Results by TCS/HDFC Bank and RIL
-And a ‘truncated week’?
During the week markets had ‘Multiple Hiccoughs’ leading
To up swings and down moments, ultimately markets closed
In green. Nifty moved around 200 points and Sensex 700.
Nifty closed the week at an important level of resistance, 5884
( Read the previous blog) .
It was Global markets and fall in US $ index which helped
Equities to move up. Few positive results and no Negatives from
Some, helped investors to be confidant about remaining earning
Season leading to ‘Higher levels’ in market.
Most important thing is, irrespective of number of ‘Global and
Local’ bad news and events Nifty has not ‘Breeched 5400/5310
Levels during last few trading weeks.
Indian markets have moved around 10% in an upward direction.
(from the lows).All the asset classes , Equities, Precious metals,
Commodities, have gone in an up move during last few days
Momentum is riding the ‘Fundamentals’ in taking indices at higher levels
Now If……
Earnings (some what better) help the momentum, it will add to
On going up trend to move markets beyond 6000/6115 levels
From last few weeks pattern it looks like market is in a phase of
‘CONSOLIDATION’,(in a range ,5690-5959) though volatile one.
Market during its wield swings has not violated the lower
Supports at 5580/5650, indicative of a strong base formation
Nifty has tested upper and lower boundaries of the range 5690/5950
Four times without making either decisive low or top in last few weeks.
Now is the test of Bulls and Bears ……….Till the fight is on, let us go
By the events
Events during next week
Global
-Rate meeting by Fed Ben Bernanke(event is over)
-Press conference on Wednesday by Ben Bernanke
(For the first time)regarding ‘monitory policy’
And fate of ‘Stimulus package’
-US Treasury Auction on Tuesday/Wednesday
-BOJ(Bank of Japan ) meeting for ‘Monitory
Policy’ first time after Tsunami.
-US earning week
-Results of European big Banks like
UBS/Destuch/Credit Suisse/Barclays
Local
-Earning Season, Results by major cos.
-Expiry on Thursday
All these Global and Local events will keep markets around
The World in a, ‘Volatile’ phase.
Indian markets will exhibit extreme volatility due to expiry and
Earning and will decide its course in short term on global
Events.
There will wield moves in Indices but depending on results
Individual stocks may exhibit strength or weak ness in coming
Days. One has to keep close watch on events around the
World and in Indian Industrial, Political and Financial front,To
Keep buying at all the falls and booking profits at higher levels
Will be the best way to manage ‘Volatility’
Traders and Investors should plan their moves accordingly
The suggested strategy will be
Market Strategy:
-All long term buys should have a deep down stop loss
@ 5480
-At the same time all the dips should be bought with
A long term perspective
-Traders should keep booking profits at every higher level
And go long at small (50/70 Nifty points) correction in Nifty
Till the trend does not get reversed
-Up move will be Intact as long as Nifty is above
5580/5650 and will continue with some intra day or
Intra week corrections till we move up to 6115
- Short term trend reversal will be indicated if Nifty trades below
200 DMA @ 5629, and a close below 200 Exponential
Will @ 5603 definitely suggest a deep correction
--Long term trend will be positive till we are above 5310.
Any close below 5310 will indicate a’ bear market’ in
Medium term.
Keep Watch on the levels
5880/5920/5959 AND 6003
5813/5750/5660
COMMENTS
Looking at the developments in last few weeks , it looks
Like Bulls are riding the momentum and have decided
To take markets above 6000 (Nifty)
Traders are advised to buy at all the falls and book
Part profits at higher levels. It is better not to go against
The trend which is ‘Up’ in near term.
Next few days will be of ‘Extreme’ volatility due to the
Events around the world and earning season in India
Better work with ‘stop loss’ and ‘book profit’ methodology
With a ‘Stock picking’ at every fall to built ‘Portfolio’
For long term investors
IMPRESSION
Waiting for a ‘TAKE – OFF ‘
Thanks
Dr. Vasant Bele
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