Dear Investors
‘Slapped’ by the below expectation results of Infosys
And high Inflation rate, traders, short term and positional,
Tanked Indian Stock markets on Friday, leading to a fall
In Nifty to a support level of 5800.All the indices
Were hammered, leading to a broad base fall in the
Market. Speculative longs, on the expectation of good
Results, were wound up and fresh shorts were built at the
End of the trading on Friday.
It was a day of ‘ Double Blow’ by Infosys results and higher
Inflation numbers.
Week on week markets closed in negative
Levels on Friday
Nifty: Open: 5898/ High: 5907 /Low: 5806/ Close: 5824
Sensex: Open: 19670/ High: 19700/Low: 19337/Close: 19386
.
What Next
Resistance: Nifty has resistance close to the level of
5950 & above this level the next resistance is seen near
The 6003 mark.
Support: Nifty has support close to the level of 5759
Support: Nifty has support close to the level of 5759
& below this level the next support is seen near 5699mark.
Market is trying to go beyond the range 5800-5959, it has factored
High crude prices, scams. governance problem etc. now all depends
On earning season during next week.
As we move towards earning season and monitory policy, there
Will be increase in volatility, leading to wield swings in prices.
Traders should be careful in building fresh positions on either side
Broadly the market range right now is 5750 to 5959and as the earning
Season goes on we will come out of one of those on either side. till that
Time follow the trend and technical levels
Technical View:
Pivot at:
Nifty: 5851
Sensex: 19474
R1 (First resistance) @ 5897(19611)
R2 (Second resistance) @ 5952(19837)
R3 (Third resistance) @ 5998 (19974)
S1 (First support) @ 5796(19248)
S2 (Second support) @ 5750 (19111)
S3 (Third support) @ 5695 (18885)
Significance
There are cluster of resistances around pivot @ 5851, 5880
And R1 @ 5897, ONCE Nifty moves conclusively above R1
Then R2 (5952) is the main trend decider for market. Close above it for
Two /three successive days will take Nifty to 6000 and above.
All the shorts should have a stop loss at R1 (5897)
While immediate support is at S1 (5796) , it is S2(5750) which will
Be vital for the on going rally, if Nifty breaks it then the down move can
Get accelerated to lower levels.
All longs should have S2 (5750) as a stop loss and fresh shorts can be
Created below S3 (5695)
VXI (Volatility Index)
Pivot @ 21.17
R1@22.81/ R2@ 24/03/ R3 @ 25.67
Significance
Rise in VXI is indicative of nervousness in market, as there are
Number of events around VXI will be on rise leading to weild
Swings in day trades.All positions should be guarded with proper
Stoploss and early profit booking.
DMAs(Day moving averages)
5 DMA @ 5863 (19522)
10 DMA @ 5858 (19545)
100 DMA @ 5707 (19034)
150DMA @5824
200 DMA @ 5721(19059)
5 Exponential Av. @ 5848(19475)
10 Exponential Av. @ 5823(19393)
100 Exponential @ 5669 (18896)
Significance
10 DMA @ 5858 and 100DMA @5707 will be the trend
Decider levels
Nifty is at 10 Day Exponential @ 5823, close below this
will take Nifty to 100DMA @ 5707 , which will act as a
near term support
For present rally to continue Nifty must trade above
200 DMA @ 5721
Keep watch on
5858 / 5800 /5721 /5707
COMMENTS
Market was moving well towards 6000 but suddenly the
First result by Infy and Inflation made traders and speculators
Nervous leading to a surrendering the gain of 450 odd points
On previous trading day.
Market is trying to out of get of the clutches of the 3 I ,
Inflation, Interest rate fear and Infosys(OR IIP number)
Bad results
Every time bulls try to take markets beyond 5950, one of the
Factor spoils the game
Till Friday FII supported the markets to move above 5950,
Which was liquidity driven, moment the fundamentals start
Faltering, like, earning (Infy results), Inflation number, bulls are
Unable to push markets beyond some limit
The fact is that, present rally has no strong legs to move
Beyond strong resistances levels like 5940/5970. Unless
Fundamental strength improves it looks difficult for markets
To move in higher band of 6003-6115
Though valuations are factoring
Oil prices
Global uncertainty
Political and Policy problems in India
Still the effect of
Inflation
Interest rate fear and monitory tightening by RBI (May 3)
Rise in diesel and kerosene prices after state elections
Earning of the major industries during next week
Has to be seen in coming days and weeks
All these things will not make life easy for
‘Steroid driven strength of (Liquidity) bulls’
"If earnings disappoint greatly from any of the major players in
cap good, manufacturing and auto sector then it will
be a catalyst for return in volatility and nervousness in market.
So the advice is …..
Wait and Watch till the events like, Inflation, Interest rates,
Oil and gas policy get unfolded then decide the direction
In which to move. On the back of ‘Liquidity’ we may move
To higher levels but we might fall sharply once the events
Do not support the rise
The worry for the RBI is, why inflation despite all the
rate hikes that it has done is refusing to come down
may trigger a serious tightening by RBI on ‘Rate
And Liquidity front. Which in turn will make things difficult
For bulls to carry their run.
So traders and investors should be cautious
It is advised that unless and until Nifty moves above 5959,
close above that for two to three trading sessions one has
to play market on the ‘Day’s Merit’ or book profits at higher
levels up to 5950 and enter at dips up to 5759
Market strategy :( Monday and Next week)
- One can go long above 5959 with a target of 6003/6115
And also at 5800 with a stop at 5759
- All longs created at lower levels should be partially booked
At and above 5917
- Bears can create shorts at and above 5850 with a stop at
5917 as an upward stop loss or a stop at 5759, or below
5700
- 5759-5800 and 5917-5959 should be treated as
‘No trading zones
So, if you have long positions, keep a stop of about 5750, and all short
Sellers should watch 5950.It is likely that the earning season will remain
tough and unpredictable. So, do not try to build huge positions. Try to
be stock specific.
Looking at the ‘Ground realities’ I would not suggest investors to buy at
These levels as the fundamentals are not very much in favor of it.
Recent rally was mainly a ‘Liquidity Driven’ one, now probably fundamentals
Will play a major role, and they are not as rosy as imagined so I do not feel
Investors should be in a hurry to built portfolio
All the panic falls can be used to either trade for short term or built
Fractional long investments
Stock Specific
Crompton
RIL
Canara Bank
Power Grid
Hero Honda
L and T
-Camphor and Allied @ 228(Sl@214/Tgt,246/268)
-Federal Mogul @ 245 (Sl @221/ Tgt 266/283)
(Goetz)
SPIC (Southern petrochemicals)@ 23(Sl @22/Tgt 28/30)
-Celestial Lab @35 (Sl @ 30, Tgt, 44/45)
-Sonata Soft. @ 46 (Sl @ 42, Tgt 52/56)
200 DMA @46.90)
-EMCO @ 66( Sl @62, Tgt, 72/88)
200dma @ 66.70/ 50DMA@62)
-Sharp Ind.
(BSE Code:52339)
200DMA @35, 100DMA @ 44
-Elecon Eng.@ 76 (Sl @ 68, Tgt:82/88)
50 DMA @ 68 / 100DMA@ 72/ 200 DMA @ 83
-Herculis Hoists @ 245(Sl @ 228 Tgt: 255/274)
50DMA @225/ 100DMA@255/ 200DMA @ 274)
Also go for long term investments in ……
Sparc (Sun pharma recent advances)
Navneet
Tainwala Chemicals
KEC international
Suryalata Spinning
Himmatsigka Sidek
IMPRESSION
IN NO MAN'S LAND
Thanks
Dr Vasant Bele
All the views are personal, invest after consulting experts
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