Monday 16th May 11
Tilaknagar Ind. Sujana Towers Sumeet Ind.
Dear Investors
On Friday markets suddenly did a ‘somersault’ in an
Upward direction.
It was due to results of assembly election in 5 states and
Mainly, demolishing of left parties in Bengal and Corrupt
Government of DMK’ led to a ‘Jay-Mamata’ rally, Positive
Sentiments took the ‘Impulsive Rally’ to 5600 level, once the
Euphoria was down; Nifty could not sustain the sudden spurt
And closed at, 5544.
The good part is that, it has closed above 5500, giving some
Hopes for the ‘Bulls’ to survive
Data for the day:
Open: 5492(18362)
High: 5605(18724)
Low: 5472(18220)
Close: 5544(18531)
Advance Decline: 1582:1182
Turnover: 180 thousand corers
What Next:
It was strong sentiment and elevated mood of the investors and
Traders on the back drop of results in Bengal and Tamilnadu, took
Nifty to 5600. Though Nifty has closed above 5500, with good
Volume and breadth, it has to be seen how it behaves during next
Week
As long as Nifty is trading below 5604(200 Day Exponential
Average) and 5757 200DMA, it is hard to accept that it is in
‘Continuation’ of the ‘Up move’, stared after 5330.
As Nifty has closed above 5DMA, short term looks positive, but
All depends on events like results of the major Industries in
Next few days, commodity prices, crude oil prices and Global
Market conditions during next few days to come
Monday, it has to be seen how markets respond to the
‘Petrol price Hike’ and possible diesel price hike? On 23rd
To maintain an up move, started on Friday, Nifty must remain
Above 5480/5470 level on closing basis, it should be able to take out
Immediate resistance at 5604(200 Day Exponential average) and
Close above 5630
All depends on
Global Market moves
Commodity prices
$ Index
Results of SBI/L&T/ITC/Tata Power/JP Associate
Government’s moves on policy front
Onset of Monsoon in Kerala
Levels to watch;
Upward: 5608(18743) / 5632(18790) /5659(18868)
Downward: 5504(18511) / 5472 (18280) /5420(18100)
Technical View
As Nifty has pulled back from 5605, it will act as a
Strong resistance going forward, 5604 is 200 Day
Exponential moving average.
Nifty is moving above 5DMA (5539), indicating that
Short term looks positive.
Any down move during the day will have a strong
Support at 5504 (Pivot) and 5472, which was low
On Friday,
Real test of the ‘Up move’ will be, resistance at
20 Day Exponential at 5632 and 50DMA at 5659.
For a long term up move, Nifty must close above
200 DMA at 5757, till that time all up moves
Should be treated as ‘Bounces’ in a correction.
Nifty is having a strong support at 5330, as long as it
Is intact or 5310 does not get violated, chances of
Reversal, to up move will be intact.
5330 is to be watched in a down move and
5632 in an up move as vital numbers
Market strategy;
On the back of ‘Petrol hike’ at the week end,
Do not open trades in first 30 minutes
Then trade with the trend.
Keep stop loss at 5420 for all long positions
Fresh longs can be created as long as Nifty
Trades above 5504 with a stop loss at 5420
All shorts should have stop loss at 5610 and
5632
Fresh shorts can be created below 5470 and
Above 5632
Stop loss for existing shorts is at 5610 or 5420
Long term investors should wait for fresh buys
Till Nifty closes above 5630 with a target of 5698/
5757, in staggered manner
Or
Below 5472 with a stop at 5330
COMMENTS
Looking at the FII data and volumes for last week,
The rally looks like to be driven by sentiments
Than by fundamentals. As long as there is no change
In Fundamental things like………
-Commodity prices
-Inflation
-$ Index
-Decision on, Petrol and Diesel rate deregulation
Fertilizer pricing deregulation
FDI in retail
Banking and Financial policy
Increase in Capital expenditure
Environmental hurdles
Etc.
-FII inflows
- Global situation
Even technically markets are critically placed with a ‘Negative Bias’
Any added negative trigger will create a panic in market leading
To break of vital supports at 5310.
Traders and Investors have to exercise extreme caution in their
Short term and long term trades.
Though Friday was a day for the bulls going forward ‘Odds are
In favor of ‘Bears’. It will be too optimistic to say that the
Bottom is in Place’
Investors can start buying only after 5757(19140) or below
5177(17296)
The equation can change only if…….
There is sudden change in perspective of FII leading to surge
In inflows
Government takes some bold decisions
Commodities keep falling relentlessly
Otherwise markets is not in good health
Stock Specific;
A)
HUL
ITC(Results)
G E Shipping
Colgate
Ranbaxy
Lupin
HCL Tech
B)
Ador Fontech
GMDC
BOSCH
United Phos
Camlin
Kaveri Seeds
Surana Ventures
Arvind
Gati
Celestial Lab
For stock from A list keep 3 to 5 % stop loss
While stocks from B list can be bought at every
Fall for long term investments, in case of profits,
In short term, one can book and re enter at lower
Levels
IMPRESSION
CONFUSED
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution
And after consulting experts
Read market next week as a separate blog
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