Dear Investors:
Monday started with ‘Global’ bad news affecting Indian stock
Markets, it was again Europe Debt Crisis which caused damage
To the markets all over the world. Nifty opened with a gap down
And went on falling slowly during first hour, fall was aggravated
By bad results of BHEL and Satyam leading Nifty to sub 5400
Level. Selling was across the sectors and with good volume. The
Main indices fell to the low of last two months, Nifty below 5400
And Sensex, below18000
Data For the day
Indices
Open: 5456(18269)
High: 5456(18269)
Low: 5373(17971)
Close: 5386(17993)
Advance: Decline: 801:1973
Turnover: 1.46000 cr.
What Next
Nothing but to, wait on side lines for some surprise to happen
And downward journey of markets stops, wait on side lines
Till market stops falling and consolidates in a range for
Few days to weeks.
Nifty has violated all the important support levels with ease
And speed, which makes traders and investors more nervous, all the
Higher levels are sold out in few hours and we are at a new low in
Minutes, this is definitely a worrying sign.
The intra day bounces are used by traders, stuck at higher levels, to
Move out and bears use it for fresh hammering.
As long as Nifty holds 5330 there are chances of bouncing back to
5515 and above. Anything beyond that looks difficult. On the
Contrary, break below 5310/5280 will open the flood gates towards
5177 support, so watch the levels,
Levels to watch
UPWARD: 5430(18180)/5480(18370)5515(18480)
DOWNWARD: 5354(17800)/5310(17600)/5225(17450)
As long as we can not change ground realities we have to
Follow data, so go with technical levels
Technical View
Nifty is at an important support level, 5380, which is a
‘Line of Action’ between bulls and bears.
In case of some bounce, Nifty will face lot of resistance
At 5480, which is nearer to?
10 DMA @ 5489 and 10 Day Expo. Ave. @ 5486.
Unless Nifty moves above this there are no hopes for
Bulls to move above 5500.
Nifty has to move above 5549(20 Day Expo. Average)
To continue it’s up move
In case Nifty fails to move above 5591(200 Day Expo.Avrage)
(Which it will) from current level of 5380, and starts fresh
Down move, it will have support at 5349 and 5310, these
Will be last hopes for bulls to return back to their up ward
Journey.
Once 5310 is broken, Nifty will head towards 5177
(Low of Feb 11), and 5050 with some pause at 5220
Watch the levels
10 DMA @ 5489
10 Day Exponential Average @ 5486
20 Day exponential average @ 5549
20 DMA @ 5591
200Day Exponential @ 5591
200 DMA @ 5755
Market strategy:
-Do not trade in first half hour
-Have small trades with stop loss and small targets
-Go short at every bounce till Nifty moves above 5550
-Carry all the existing shorts as long as Nifty is below
5600 and above 5310
-Avoid fresh shorts between 5550 and 5600
-Avoid going long till Nifty does not move either above 5550
Or falls below 5310.
COMMENTS
We are back to square one, same events and same results
Indian markets are trapped in the vicious circle of cyclical
Bad events and news items, Indian politicians are adding
Fuel to the strength of Bears (probably they are short in market)
For example
Global markets falling
Finance Minister’s statement on Inflation
Continued bad results, BHEL, Satyam…
SAIL FPO postponement’
ONGC FPO
TISCO results?
Seasa Goas problem…….
All this caused a sharp sell off in already ‘Paralyzed’ markets
Leading to 2 months low on closing basis
. Nifty has closed below 5400 but on a vital support at 5380
How far this will hold is anybody’s guess.
Day by day the Bulls’ are getting ‘Stripped to the Bones’ by bear
Attack. There is no escape from the ‘Tightening Grip’ of the bears
in near future, only thing to see is, how far and how fast we fall ?
I heard some consoling comments from weak bulls….
“Traders would not like to get caught on the wrong foot and
may not go short in given situation. They may, probably, cover
their shorts relatively quickly. So you may see the buying emerging
at 5,350 kind of a level “
But….
At every fall from 5900to5800, 5700 to, 5600, 5500 to 5400’and
Now at 5300,
We are hearing these ‘Weak Cries’, but bears have no sympathy for
Bulls and are ‘Running amok’ across the sectors at every support
Level ruthlessly, with renewed vigor and strength given by Global
Events, Indian policy maker’s comments and actions
I do agree with the feeling, but ground realities doesn’t support it,
There is selling at every rise, leading to lower levels, I had written in
Monday’s blog, ‘valuations are compelling' to go for ‘Bottom fishing’,
But sentiment and circumstances are not encouraging, unless
Bad news and events stop, and market ‘consolidate’ in some range,
For few days to weeks, we are not going to move up to important
Resistance levels, 5590/5650.
Market has ‘corrected in valuations’ now it needs ‘Time correction’,
till that occurs ‘Bulls’ will have to go through ‘Labour Pains’ to deliver
Higher levels
Bulls are like ‘Chataka’ (A Bird waiting for rains) looking at holy heavens
For some good news and events to escape the .'Bear Run over’
Stock specifics
It will be safer to hold all the trades till all the dust gets settled
And market consolidates in a range.
Volatility is so high that any day trade is not profitable
Long term investors can try bargain hunting (Not Bottom Fishing,
We are not at bottom) in small lots at every fall in good stocks
IMPRESSION
‘STRIPPED TO THE BONES’
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution and after
Consulting experts
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