Dear Investors
On Monday stock markets drifted down to close near the lows .
It was because of profit booking due lower IIP (Indian industrial Production)
Number and weak global markets.
Advance decline ratio was on negative side while all the other indices closed
On lower side. Only satisfying thing was, volumes were on lower side.
Significant thing is Nifty has closed below psychological support
Level of 5800
Levels on Monday
Nifty: Open: 5805/ High: 5830/Low: 5777/ Close: 5785
Sensex: Open: 19383/ High: 19462/Low: 19242/Close: 19262
What Next
Markets are struggling to keep above important resistance
Levels like 5800/5850. There is selling pressure at every higher
Level indicative of either profit booking and/ or lack of fresh buying and
Adding of short positions at every high. Unless Nifty manages to
Close above 5880 markets are not going to reach 5900 and above.
5880, being a 61.8% retracement level of the fall from Nov. 10 top
To Feb 11 low (6275-5310) (Read blog dated 3rd April). These acts as
Supply level once we close above this we will be moving to
A new resistance level @ 78.1% retracement above 5959.
To me it looks very difficult that Nifty will move above 5960 in
Near term, on the contrary all the indicators like……..
Slowing of FII flow (They are sellers on Monday)
No fresh buying by DII (Domestic Institutions)
Non participation of HNI (High net worth Individuals)
And retail investors
Higher Oil prices
Likely Increase in domestic oil prices in next few days
Increase in Inflation and Interest rates
Slowing down of growth
Possibility neutral to lower result season.
Political instability
are not conducive for a ‘Remarkable Up
Move’ in markets
Either market will move in a 5770 – 5940 range or it
Will drift down to the levels of 5700-5660.
Only a hope of better result and
‘Good Monsoon’ and ‘Reduction In crude oil prices’
will help markets from 'Fear of a Fall'
To me chances of markets moving in a lower range are more
Than getting in to 5990/6003. It looks we will
Visit lows before moving higher.
Watch the levels:
UPWARD; 5830(19450), 5879(19580)
DOWNWARD: 5760(19194), 5711(19010)
Technical View
Technically markets are facing certain difficulties
In scaling higher levels. Chart patterns indicate that
Unless Nifty closes above 5880/5859 range it is headed for
A substantial fall. If Nifty closes below 5760 then it will
Reach lower levels and support will come only at
200DMA (5701).
Technicals are pointing to a ‘Fall’ in short term
Investors and traders are advised to follow Resistance
And support levels,
Pivot at: 5797(19310)
R1 (First resistance) @5817(19378)
R2 (Second resistance)@ 5850(19494)
R3 (Third resistance) @ 5870(19562)
S1 (First support) @ 5764(19194)
S2 (Second support) @ 5744(19126)
S3 (Third support) @5711(19010)
Significance
Pivot at 5797 will be the first resistance for an up move
Nifty has to close above it to remain in an up trend.
To continue with the up trend Nifty has to close above
R2 (5850), R3(5870). Close below S3 (5711) will lead to
A panic fall leading to the levels of 5660/5569
VXI (Volatility index)
Pivot @ 21.07
Significance
There is gradual increase in volatility indicative of
Nervousness and uncertainty
Higher levels are sold by traders and speculators
DMAs(Day Moving Average)
5 DMA @5887 (19608)
10DMA @ 5830 (19426)
100DMA @5710(19042)
200 DMA@ 5716 (19041)
10 Day Exponential @ 5803 (19327)
100 Day Exponential @ 5661(18871)
Significance
Nifty is trading below all the short term (5/10) averages.
This indicates a weakness in near term. Next support is
At 100 and 200 DMAs (around 5700)
Once Nifty moves below 100 DMA at 5710 it will move
Towards 100Day Exponential at 5661
To keep up move intact Nifty must move above 10DMA
AT 5830, while 5880(5DMA) is the key resistance, once
Nifty is through it then and then ut will test 5950/6000.
Till that time book profits at all higher levels.
COMMENTS
With softer result season have created nervousness
In the market. Though FIIs were buyer for last few
Sessions, Monday they booked profits to a great extent
There is slowing down in flows from FII and DIIs,Market
Breadth (Advancing stocks to Declining ones) is negative and
Volumes are not high.
Traders and Investors (Bears / Bulls), are confused by the
Growing unpredictability, environment is full of events and
There are too many unanswered questions regarding….
Inflation, Results, Growth, and Interest rates, Global recovery,
Oil prices outcall this is responsible for daily volatility.
Markets are at the mercy of FIIs and day traders, environment
Is not conducive for long term investment or carrying positions
Forward.
Investors and traders are advised to book profits at higher levels
And remain in cash. Unless a a trend is established one should
Not create long-term investments
Near term looks more towards downward than up ward.
Stock specific
Keep light positions on either side with stop loss and
Quick profit booking. Do not carry positions for next
Trading session
ICICI Bank
Sterlite
RIL below 980
ITC
HUL
Sell TISCO @622(Sl@635, Tgt.600)
Hindalco @ 209 (Sl @ 214, Tgt 198)
Buy
Sterlite Tech @ 62 (Sl @58, Tgt.72)
Go long in
Artson Eng.
Celestial lab.
Tutis Tech
Polaris
Graphite India
Federal Bank
GATI
Gate way distripark
All these can be converted in long term investments
IMPRESSION
NON CONFIDANT with A DOWN WARD BIAS
Thanks
Dr. Vasant Bele
All the views are personal, Invest after consulting experts.
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