Lingering Uncertainty

Dear Investors

L and T‘s in line of expectation results gave a ‘Face saving’ support

To market, which after opening flat moved down to the support at 5400

(5411). Bulls tried to take cues from L and T results to push Nifty at

A reasonably higher level, 5452. At the end, without much support

From other heavy waits, Nifty closed barely 7 points up at 5428.

Market breadth was discouraging with more number of declining

Stock and turnover too was low

Data for the Day:

Open: 5448(18166)

High: 5452(18198)

Low: 5411(18057)

Close: 5428(18141)

Advance: Decline: 1124; 1666

Turnover: 1.18 Thousand Cr.

What Next

Without much action on ‘FII inflow, DII buying and Retail participation

Markets are going through ‘Lingering Uncertainty’. Most of the heavy wait

Stocks have corrected to compelling valuations, but as long as Micro and

Macro conditions do not improve, funds will not be flowing to Indian Market.

All the participants, FII, DII and retail investors have burnt their fingers in

Last few weeks volatile market conditions. There is no strength in market

To stand on its feet. it will, probably, be drifting to lower levels passively

Before some ‘Surprising Event’ supports it. In absence of positive

 Developments On ‘Fundamental’ front technical data  will give some perspective

Regarding where, from here, now?

Levels to watch

Upward: 5470(18273) /5501(18366)/5556(18490)

Downward: 5408(18066) /5349(17800) /5310(17600)

Technical View:

Pivot at: 5430(18132)

Technically market is due for a ‘bounce’ up to the nearest

Resistance level of 5501, with some support from traders

Nifty may pull up to the levels of 5550, where it will have

Selling pressure.

Nifty is moving below all the short and medium term

Moving averages like

5 DMA @ 5464

5 Day Exponential @ 5445

10 DMA @ 5501

10 Day Exponential @ 5501

40 Day Exponential @5601

This gives an indication that the short to medium term trend is

 Down, what ever pull back comes will face resistance at

40 Day Exponential average @ 5601

 Unless Nifty moves above 200 Day Exponential average at

5592, it will be in a ‘Medium term’ down trend

Any ‘Sympathetic bounce’ (Sympathy for bulls and over

Sold conditions) up to 5550/5601 will have fresh selling by

Traders who are stuck at higher levels, and fresh short selling

This will trigger fresh down move having supports at

5380/5330/5310.

Once Nifty breaks 5310 then it will be headed for the recent low

At 5177 on 11th Feb 2011,

 I am writing these levels repeatedly, because Nifty is making

Lower tops and lower bottoms, since the time it has started

Correcting from 5950 which was 61.8% correction level of the

Pull back from top at 6338 on Nov.5th 2010 and low at 5177 on

11th Feb 2011(these are intra day values, closing values were ,

6310 and 5310 respectively)

Market strategy:

As long as market is in an uncertain territory it is better

To keep away from, positional trading or long term buying.

At the most day trades can be done with strict stop loss

And early profit booking

First half an hour should be spent in assessing the trend

(Dependant on, Global market movement, Result on that day and

Overnight news item)

All long positions should have a stop loss at

5400/5330 with a target of 5501/5550

Fresh shorts should be avoided at present as

Nifty is likely to bounce on the back drop of

Oversold conditions and approaching of expiry

For present series

Existing shorts should have a stop loss at 5501

And 5537

Wait for investment buying or buy below 5200

Or above 5755

COMMENTS

Even though Indian markets are underperforming its

Pears in emerging markets there are no signs of FII

Looking at it as an investment destination. All this

Is due to worries related to

High inflation

Increasing Interest rates

Decreasing growth projections

No progress on reform front

Poor earning by major companies

Unless there is improvement in all these, leading to

Higher earning, Improved growth and stability

In financial market, neither FII nor Retail investors will

Turn towards Indian stock markets, this is possible only

If there is….

 Good Monsoon

    Leading to reduction in Food inflation’

Interest rate stabilization leading to easy credit availability

    To cap good and Infra cos.

 Aggressive policy decisions in,

   FDI in retail and Insurance

   Financial policy

  Oil and Gas deregulation

  Subsidy reduction and so on……..

All this will take some time, till then Indian markets will have

To go through ‘Economic pain’

Stock specific

As long as markets are going through the difficult phase

It is better to hold aggressive trades.

ITC

HUL

Bharti

Lupin

L & T

NTPC

Elecon Eng

GMDC

Jubiliant Food

Talwalkars

V Guard

Blue star

NIIT

Camlin

Celestial Lab

SPIC

Ador Fontech

Hercules Hoist

Sabero Organic
BOSCH

IMPRESSION

Thumbs Down

Thanks 

Dr. Vasant Bele

All the views are personal, invest with caution and after

Consulting experts