Market for Next week and Monday
Sintex Ind.
Dear Investors
Friday was a day of ‘Breather ‘for bulls. After 400 points
Fall since May 3ed nifty managed to close in green for the day.
This looks like to be a ‘Pull back’ from last few days heavy
Selling by FIIs and DIIs and HNI, Nifty managed to close above 5500
Giving some hopes to continue the up trend in coming days.
All depends on fresh buying and possible ‘short covering’ in days
To come.
Levels on Friday
Open: 5477(18298)
High: 5564(18568)
Close: 5551(18518)
Advance: Decline: 3:1
Volume: 130, thousand corer
What Next
Caution is the key mantra for next few days, the rise in market
Was due to short covering of extreme oversold positions during
last 8/9 days.
Nifty has corrected by 500/550 points from recent top, it is
Possible that it may pull back to first resistance level of 5600/5603
Level
Nifty bounced back from the support level of 5400 and around
This may last for next few trading sessions,
Friday’s data suggests that the rise in Nifty was secondary to
‘Short covering’. And without any fresh long term delivery base
Buying in cash market
Nifty may pull to the levels of 5600/5660, where there will be lot
Of selling, the level of 5700 will act as an ‘acid test’ for this ‘pull
Back,’
If Nifty sustains, ‘which looks difficult’, 5730(200DMA)
On closing basis, then and then, one can assume that this was a
Correction In an’ Up Move’
Short term traders and positional traders can use this pull back, in
Coming days, to ‘Exit positions’ and/or create fresh short positions
Up to 200DMA @ 5730
Traders and Investors should be very cautious in creating fresh long
Positions beyond 5660/5690, otherwise they may get in to a
‘Bull’ Trap’. Technically it’s a classic situation for it to
Take place
(Bull trap: A false signal indicating that a declining trend in a stock or
Index has reversed and is heading upwards when, in fact, the stocks or
Index will continue to decline
.
A bull trap often causes some investors to buy the stock, but because
The stock continues to decline after the initial signal, those who bought
in are "trapped" in a bad investment.)
Levels to Watch
Immediate resistance at: 5603/ 5660
Pull back can extend up to: 5690/5720
Support for the fall back is at: 5515/5480
Fall below the levels of: 5420/5389
Should be taken as a serious indication of resumption of
A ‘down Move’
Technical View
PIVOT AT: 5529 (18452)
As it has been written in previous articles
In a ‘Rising market’ resistance levels are very important.
In a ‘Falling market’ one has to keep watch for support levels
This up move or ‘Pull Back’ will have first resistance at
5600/5603 level (nearer to 5DMA @5602).
Break above 5602 will take Nifty to the 10 Day Exponential
Average @ 5641 and may test 30 DMA @ 5697.
For a change towards ‘Resumption of Up move’ Nifty has to
Close above 200 DMA @ 5755 for two to three days with
Good volume.
Disruption of ‘Pull Back’ has immediate support at 5515/5480.
Recent intra day low was at 5414, if Nifty violates this then
Market has a strong support at 5380 and 5330.
Once 5330 is taken off, Nifty will move in to a new lower range
Of 5310- 5480.
Near term watch for 5730 and 5330 as market movers in either
Direction.
Long Traders:
Can continue holding longs with a stop at 5420 or book
Profits at and above 5660/5690
5690- 5730 should be treated as ‘No trading Zone’ by both
Long and Short traders.
Add longs till Nifty breaks 5515 or climbs up to 5660
Short Traders
Do not go short in present ‘Pull Back’ till 5603/5660.
Existing short positions should have a stop at 5702
On upper side and 5330 at lower levels
Fresh shorts can be created below 5515/5480 or
Above 5660/5690
Nifty charts suggest:
Nifty is correcting the up move started from intra day low
Of 5177 on Feb.5th, (closing at 5330). It looks like, to be a
Part of larger correction from the top of 6338(intra day on
Nov.5th 2010, close at 6312)
Now Nifty is at a critical level, if Nifty breaks below 5310 then
It will be testing the levels of 5280 and then 5177,
For the time being it looks like we are headed for 5310.
Break of 5310 will be catastrophic and will lead to ‘A bear
Market’
COMMENTS
Most of the readers have written and informed me , that
Technical levels give in blogs are beyond their understandings
I can understand but ultimately they matter the most, so
Even if you do not understand the methodology, one must
Watch important Resistance/ Support levels and vital
Moving averages so as to place your ‘Buy and Sell’trades.
This rally is a’ Pull back ‘rally; it is on ‘Weak legs’,
There are no ‘Fundamental reasons’ to sustain it for
Longer period. There is no change in ‘Fundamentals’ like Inflation,
Rising rates, weak earning and falling growth.This is a technical
Pullback.
The recent fall in Indian Market was not out of trading shift of
The positions from one region to another or from one asset class
To another
. This was mainly due to changed perception in relation to
-Rising Inflation
-Rising Intrest rates
-Falling Growth projections
-Compression of industrial bottom line( Net profits)
-Government apathy in executing FII and Investor
Friendly policies
AND SO ON, indicative of a ‘Fundamental weakness, in
Economy going ahead
This can revert only if
-Good Monsoon
-Improvement in next quarter results
-Inflation drops down leading to stabilization
Of banking rates
-Post assembly result review of policies related
To ‘Oil and Gas’, FDI in retails, Ifrastructure
Fund allocation etc.
Recently, there is fall in
-Oil prices
-Commodity prices
But this is likely to be a short term corrective phase
In oil and commodity price movement in a long term
‘up trend’
so it may not have any effect on Indian fundamentals
In immediate future
It will take few weeks or months to have reflection
Of all this in
‘Inflation, Industrial Profitability and Growth
Till that time
Fundamentally we are in ‘A difficult phase’ for next few
Months or a ‘Quarter’
All long term investors are advised to be’ Cash rich’
To deploy same in coming weeks when there is one
More fall, which will take us nearer to 5000 levels
Till that time trade with ‘Technical Levels’ or ‘With
the trend’
Market Strategy for Monday
-Go long up to 5660/5690
- Book partial profits at every higher level beyond 5580/5603
- All longs will have stop loss at 5480/5420 levels
- No short trades in present situation
- Go short at and above 5690 with a stop at 5730(on
Closing basis) or below 5420 with a stop at 5310
-Long-term investors should hold fresh buying up to
5730(closing) or start below 5310 in a staggered way till
5280
Trade light, book profits at intervals, keep strict stop loss
Stock specific (Monday)
ICICI Bank
Axis Bank
Colgate
ITC
HPCL
IOC
GAIL
HCL Tech
Suzlon
Sterlite
Polaris
NIIT Tech
Sterlite Tech
Biocon
V-Guard
SPIC
Federal Mugal
GATI
DCB
Yes Bank
Ador Fontech
All trades are to be carried with strict stop loss at Nifty levels
IMPRESSION
CAUTIOUSLY EUPHORIC
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution and
After consulting experts
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