Monday 30th May 2011
Dear Investors
Friday was ‘a day of relief’’ for traders and market observers
After few days fall markets closed on positive note on the first
Day of next (June) series. There was buying across the sectors,
leading to a close above major resistance of 5470(18250)at
5476(18266) with a gain on daily basis but with weekly loss.
Giving an ‘up beat’ feeling for next week.
Data for the day
Indices
Open: 5413(18105)
High: 5485(18298)
Low: 5413(18087)
Close: 5476(18266)
Advance: Decline: 1731:937
Turnover: 1, 50 000 cr
What Next:
On Friday market has closed on a strong note at the highest
Point of the day. It was second day for Nifty to close in positive
Territory. Bulls have managed to take Nifty above an important
Resistance level of 5470/5480. It will have to be seen how market
Behaves in next few days, the main question is, was it only
Because of short covering or due to fresh cash base buying by
FII and retail investors?
Next few days trading will be crucial for Indian stock markets
In absence of either Positive or Negative triggers, how markets
Behave?
It can be answered to some extent by technical levels….
Watch the levels: Technically Nifty is at a ‘Crucial’ level,
If it moves to close above 5550/5605 then one can say that
Market is out of wood, if not, and it starts correcting to the levels
Below 5400 to say 5330/5300, one will have to conclude that it was,
A ‘Dead cat ‘bounce. In that case it may test the lower level at 5177
Levels to watch
UPWARD: 5503(18347) /5559(18500)/5605(18690)
DOWNWARD: 5420(18090)/5330(17825)/5310(17728)
Technical View
Pivot at: 5458(18217)
Nifty has moved above short term moving averages like
5 DMA @5387(17981)
1 DMA @5413(18068)
20 DMA @ 5471(18262)
Next resistance for Nifty will be at 5503(18347) and 5567(18569)
This is 20 Day exponential average.
Unless Nifty moves above 5585(200 Day Exp.Ave.) and 5630
Markets will not be qualified to call as ‘Reverted’ from on going
Correction
There is a high possibility that Nifty will start retracing from 5605
And will find support at 5400, if it does not hold there then the
Next support is at 5300/5280
Any close below 5310 will set in panic selling, leading to the
Lower levels of 5177,
For the time being 5177 should hold, if not we are headed for
‘Bear Market’
Market Strategy
Ride the trend with long positions in large cap stocks
Keep stop loss at 5330
Book daily profits \Do not carry longs for next day
All long positions should be booed at and around 5565
No fresh shorts
Existing shorts can be carried up to 5550
Keep 5550/5605 as no trading zone(fresh)
Fresh shorts can be created at and above 5605 or below 5330
With a stop at 5700/5225 levels
Long term investors are advised not to take fresh investment
Positions in this ‘Pull Up’
Wait till, either Nifty moves above 5700/5755 or falls
Below 5330
All falls below 5400 can be used to make fresh long term
Investment buys in small lots with a view of 12 to 15 months.
COMMENTS
Technically, on the charts, the ‘pull back’ looks to be nearing
Its top. It may pull some distance in absence of fundamental
Setbacks, but as long as there is no fresh buying from FII/DII and
Retail investors, it will not sustain higher levels, Net net FII were
Sellers in last week and there was no cash base buying from retails.
In such circumstances Nifty will require some ‘Push up’ trigger, to
Scale higher levels above 200 DMA at 5755
At present except Monsoon, there are no positive triggers locally.
While....
Global factors, on the contrary, are on Negative side for Indian market
As....
Crude has again started rallying
$ Index is rising
Locally at least most of the Negatives are in valuations, but
It is not sufficient to take markets beyond 5600 levels, only
If
Monsoon is good
Inflation comes down
Interest rates stabilize
Government takes some bold policy decisions related to
Banking reforms
FDI in retail
Land reforms
Divestment of PSUs
Oil and Gas subcidy
Ferilizer rate policy
And so on
Then and then markets will get some booster to move up,
With some strength, otherwise it is likely to ‘Fall Passively’
Lower and lower or remain ‘suspended’ in range bound state
(May call it ‘consolidation’)
Stock specific
All long trades should have stop loss with Nifty levels
RIL(945)
ICICI Bank(1046)
HCL Tech(508)
M&M(700)
ITC(188)
TCS(1141)
L&T(1635)
Hindalco(196)
Lupin(445)
Ranbaxy(510)
Bharti(372)
R. Com(84)
Sintex @ 180
Ramkey Infra @ 281
Everesr Kanto @ 82
GMDC @ 139
HDIL @ 161
Pipava Ship @ 81
Hind Zinc @ 134
Celestial Lab @ 31
Sharp @ 50
SPIC @ 26
Dujodwala Product @ 36
Artson Engg. @ 41
NIIT Tech @ 186
BOB @ 830
Yes Bank@ 280
United Phos @ 160
Tecpro systems@281
Elecon Engg @68
EMCO @ 59
Ador Fontech @117
All these can be converted in long term investment portfolio
Stock and added at all dips
IMPRESSION
DIFFICULT RIDE
Read Weekly market analysis as a separate article
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution and after
Consulting experts
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