Bashing (Brutal Attack)

                                               Dear Investors

                                              

It was 4^th Down day, SBI led ‘Bashing’ of Bulls was continued

By RIL,SAIL,Bajaj Aut, ONGC, Coal India and at a later stage

Even broader market was hammered by bears. Though Nifty managed

To close with 18 points loss, it had tested the vital support level of

5400 and bounced back to close at 5420, which is a strong support level.

There was heavy selling in Mid and Small cap stocks

Data for the day

Open: 5448(18177)

High: 5460(18218)

Low: 5401(18020)

Close: 5420(18086

Advance: Decline: 951:1666

Turnover: 1, 33000 Corer

What Next:

As we proceed with the earning season, tomorrow will be one more

Major index stock, L and T will be on result radar, market will be keenly

Watching the results and ‘Bears’ will be ready with their sword to continue

‘Capitulation’ of ‘Bulls’. Market will be looking at EGoM (Empowered Group

Of Ministers) meet scheduled in this week or next week, to discuss Oil

And Gas policy, (mainly Diesel price hike and de regulation)

There are some global factors which will be influencing Indian markets 

Like-------

 European Debt situation, mainly Greece, which will be discussed in

IMF (International Monitory Fund) in this week

China monitory tightening will have effect on commodity prices so also

$ Index movement and Crude.

All these factors will decide where Nifty settles, below 5300 0r above 5400

Will be the main worry because once Nifty drifts below 5310 then there will

Be ‘Panic Selling’

Fundamentals are not supporting Nifty to move up, it will be having lot of

Resistance in an attempt to move up, while once it slides below vital support

It may move to significant lower levels, this can be well demonstrated

By technical data of the market

Levels to Watch:

Upward: 5486(18306) /5505(18380) /5550(18510)

Dowanward: 5401(18020)/5370(17920)/5310(17600)

Technical View:

Pivot at: 5427(18108)

Nifty is moving below all the short term moving averages  like

5 DMA @ 5477

5 Day Exponential Average@5454

10 DMA @ 5505

20 Day Exponential @ 5569

This indicates short term bearishness in market

Any bounce back from current level will face Resistance at 5480

And 5505

Nifty may move above 5515 if there are some surprises

From results or global markets,

All the technical indicators along with Fundamental concerns are

Suggesting, a ‘Significant’ fall in Nifty in coming days to weeks.

As stated in earlier articles, Indian market is in ‘Correction' mode

From the 5th Nov.2010 top at 6312. This may take a 'stop at 5310'

If not sustained then Nifty may drag down to sub 5000 levels.

As long as Nifty is trading below 200 DMA @ 5755 and is unable to

Close above 200 Day Exponential average @ 5594, markets will be

In a Down trend’ with support at last low at 5177 on 11Feb 2011

(Intra day)

I am trying to put forward all the ‘Technical’ details because there is

No change in fundamental situation  and............

Technical analysis always reflects a ‘Collective Wisdom’ of market

Participants, ground realities and historical data, so it becomes a vital

Tool( Though not 'the' only) in difficult situations like the one through which Indian market is.

Going.

Market Strategy

Wait till ‘Fundamental’ turmoil get settled

At 5400 fresh long positions can be created with an expectation

Of a ‘Bounce’, the stop loss for such positions will be at 5310

And profit booking at 5500.

Existing short positions can be carried up to 5500 and 5330

Fresh shorts can be created at and above 5500 with a stop at

5580

5380 -5310 should be no trade zone

Long term investors can start picking beaten down stocks

(Fundamentally sound) below 5310/5220 levels in small

Lots or Once Nifty moves above 5698

Trade in small lots with stop loss

COMMENTS

All depends on the events and results during next day or two.

Psychotechnicals are weak and there are no potentially positive

Triggers to surprise market.

Market is not in a mood to respect good news while it is in a mood

To punish stocks on smallest weakness.

At present, valuations are such that it reflects all the bad news,

Indicating completion of ‘Price correction’ but ‘Time correction’ is

Still not complete. so one has to take a cautious approach in

 next few days

Those long term investors who are prepared to wait for next 15 to 18

Months can start cherry picking in selective stocks at every fall.

Stock specific

HUL

ITC

ICICI Bank

HCL Tech

BOB

Artson Engg(45).

GATI(64)

GMDC(137)

Sharp Ind(39)

Globus spirit(140)

Elnet Technology(40)

Ester Industry(41)

Hercules Hoists(227)

BOSCH(6750)

IMPRESSION

BROKE!!!!!!!!

Thanks

Dr. Vasant Bele

All the views are personal, invest with caution and after

Consulting experts