Dear Investors
It was a second down day, not only down but deep down.
Market opened flat with the expectations of good results from SBI
On the Contrary to expectations, SBI gave a ‘Shocker’ to the markets
By producing disappointing results, market never regained from this shock.
It was helped by RIL, ONGC and Sail, to ‘Drift Downward’ to threatening
Levels of 5421, at the end closed just above that at 5438.
The day’s trade was most ‘Frustrating’ for bulls. It looks beyond their
Capacity to Stop the ‘Spiraling Prices’. It looks that Bulls are in
‘Deep waters’
Data for the day
Open: 5496(18374)
High: 5523(18435)
Low: 5421(18084)
Close: 5438(18137)
Advance Decline:1115;1739
What Next
Today’s fall has taken markets ‘On the Edge’ of bear market.
Nifty has broken important support at 5480 with volume on
Closing basis, and is hanging on a weak support to fall any time
It’s a ‘SOS’ situation for ‘Bulls’ unless something
Dramatic happens it will be Difficult for ‘Bulls’ to stop the
‘Bear storm’, Nifty is headed for 5330 levels in days to come
This will be the last support for ‘Bulls’ to come back and get in
An up move, otherwise markets will be in ‘Bear Grip’
I have been constantly warning all the readers and traders about
Possible threat to the markets, read last few ‘Blog posts’
Like:
Day (Days) of crisis, Red alert, Hanged till Death,Screwed,
Optical illusion,Impulsive rally, Blind Spot and so on.
There were some readers who were not happy regarding
Bearish tone in recent ‘Blog Posts’ , it was my definite
Perception that ‘Markets are headed down’ and so was
The warning given, there is nothing like , ‘I am bear or a Bull’
I am an analyst, of the situation, fundamentals and technicals.
There are sound reasons for this market to take ‘Down trend’,
UNLESS THERE IS SOME CHANGE IN FUNDAMENTAL
SITUATION TECHNICALS WILL NOT IMPROVE,
So, as long as markets are in ‘Bad fundamental’ situation, one
Should go by technical data so as to protect capital or get
Profits. In stock market, when ‘Fundamentals’ do not work
technicals always help protect trader's and investor's intrest
and capital
and capital
Watch the levels
Upward: 5501(18350) /5527(18461)/5602(18704)
Downward: 5400(17920)/5380(17800)/5330(17580)
Technical View
PIVOT AT: 5460(18218)
Any bounce back from yesterday’s fall will face resistance at
5500(18353), the level where, Nifty had a long pause before falling.
Nifty is below all the ‘short and medium’ term moving
Averages like
5DM@5527(18461), 5Day Exponential @5496(18344)
20 Day Exponential @ 5602(18687)
Unless 5Day exponential average is taken out Nifty May
Not get in to and up move and there will be selling pressure
At 5DMA@5527/5550.
As long as Nifty is below 200Day Exponential average@ 5587
Market will be in a down trend.
Clearing of 200DMA is necessary to change the long term
Trend from down to up otherwise Nifty is headed to its
Low at 5330
Market Strategy:
No long positions, till Nifty moves above 5509
All existing long positions should have stop loss at 5330.
Wait to create fresh shorts positions till Nifty breaks 5380
Or moves above 5550.
All existing shorts should have stop loss at 5330 or
5602
Long positions should not be carried for next trading
Session
Traders can carry forward shorts for next trading days with
Give stop loss.
Trade soft and book early profit or loss
5330-5380 should be treated as No trade zone
Long term investors are advised to start nibbling from
The levels of 5380/5330 in small lots and go on adding
Up to 5250.
Once Nifty breaks below 5310 no buying is advised till
5220
All the bounces will be ‘Dead cat bounces’ till Nifty
Moves above 5500 on closing basis
This is the market for ‘Sell on every rise’
COMMENTS
It has been repeatedly stressed, in previous ‘blogs’, that
Market is going through the a ‘Correction’ of the
Move from 5177(17296) intraday low or 5310 on
Feb 11 to the high 5944 on 6th April 11.
Or a longer up ward corrective phase for the fall from
6274 on 10th Nov.2010 to5310 close on 11th Feb 2011
Nifty is moving in a Lower top and lower bottom
Formation since the level of 5944, this is indicative of
A downtrend which will have first major support at 5330
And then at 5250. If Nifty breaks these levels on closing level
Market will slide down to test the low of Feb 11 at 5177.
It looks that nothing, Technicals, Fundamentals,Sentiments or
Even Global environment is encouraging for Investing in Indian stock
Markets because..............
-Result season so far is not good
-Inflation is not under control
-Another rate hike is in offing
-FII are net sellers
-No fresh cash base buying from MUTUAL FUNDS
LIC or Retail investors
-Global markets are under pressure,
-US Housing data is discouraging
-$ Index is rising
Commodities ‘leading to fall in commodity prices.
So there are host of factors responsible for trader's and investor’s apathy
Towards Indian stock market.
Investor's market
F&0 TURNOVER IS INCREASING WHILE THERE IS NO CASH
BASE BUYING.
One can hope that it will change if............
Monsoon is Good
Commodity prices coming down and stabilize there
Inflationary pressure subsides
Rate hikes stop
Government acts on Policy Front
Global situation improves leading to……
Fall in $Index & Crude prices,
FII Flow increases to Emerging markets
Retail investors get their confidence in Indian markets
All this will take time to change, till that time we will be in
‘Bear Grip’
All fresh purchases should be on ‘Hold’ and try to ‘Get in to Cash’
Stock specifics
It advised not to trade in any of the ‘Hammered Sectors’
Like (Even though you feel that valuations are attractive)
Banking
Autos
Infra and Real estate,
Capital Good and Construction
One can trade, on day to day basis, in
FMCG
PHARMA
HEALTHCARE
Wait for further investments for long term period,
Let markets get stabilized at some level to enter
For long term.
IMPRESSIONS
SPIRALLING (down)
Thanks
Dr. Vasant Bele
All the views are personal , invest with caution and
After consulting experts
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