‘Optical illusions’

Dear Investors

IIP or no IIP, Crude or no Crude, Inflation or no inflation……

Indian markets are in no mood to stop its journey to the bottom.

It is falling irrespective of good news, Nifty is breaking all the

Supports one after another so that ‘All the support levels are

Looking like an ‘Optical illusions’

On Thursday, in later half market Started falling without support,

It was global factor which Led to a drastic slide.

Nifty after opening flat, moved in a small range

With much volume and volatility but opening of European

Markets led to a cascading effect on Nifty leading to heavy

Selling Nifty is at a ‘Crucial Support’ 5480, it has to be seen if it

‘Can Hold the support’ at 5420, A million dollar question?

Thursday’s data

 March IIP (Index of Industrial Production) at 7.3% versus 3.6%

 Food Inflation at 7.7% against 8.53

 Indices

Open: 5537 (18525)

High: 5572 (18610)

Low: 5476(18314)

Close: 5486(18419)

Advance: Decline: 1848: 943

What Next:

Today’s fall has opened the possibility of Nifty moving

In to ‘New lower Range’ of 5420-5550.

It is expected that the assembly results in favor of UPA

May encourage government to take ‘Bold policy decisions’

Like, Oil and Fertilizer price deregulation, FDI in retails,

Fresh apex and so on.

It looks that ‘No news is a Good news for stock markets.

So, one has to be very cautious in building positions. Even

The intra day volatility is so much that it becomes difficult

To trade in a day.

. It is better that traders and investors should

Refrain from entering markets till there is stability.

Now the prime question is where the slide is going to stop?

Nifty has broken vital supports like 5515/5480, there are

Huge fresh shorts getting built in market and no fresh FII

Or  DII  and Retail buying support. In such a situation it

Looks difficult that Nifty will sustain 5400, so one has to

Watch for the levels…..

Upward: 5505(18390)/5546(18590)/5604(18684)

Downward: 5450(18229)/5420(18110)/5380(17967)

Technical View:

Pivot At: 5511(18419)

Resistance for an up move is at 5546 or 5534(5DMA) and

(5 Day Exponential average). Nifty has to move above 5604

200 Day exponential average) and 5641(20 Day Exponential

Average) there is every chance that all the up moves to 5600

Will face heavy selling and fresh short built up, leading to a

Fresh fall of Nifty to vital support levels,

5449/5420/5400, once Nifty moves below 5420 there will be

Hardly any support up to 5330/5310 , which was low for

Feb 11^th.

Nifty is moving below all the, short and long term ‘Moving

Averages’ like

5DMA @ 5553

20DMA @5709

100 DMA @ 5665

200 DMA @ 5757

Unless Nifty manages to cross 5709(20DMA) closes above

5757(200DMA), chances of getting in to ‘Up trend’ are remote.

Market Strategy

No longs in first half an hours trade

Trade according to the intra day trend.

All longs should have a stop loss at 5420

No fresh longs up to 5553.

Fresh shorts can be built at every rally

Up to 5660.

Fresh shorts can be carried as long as Nifty is trading

Below 5515/5604 with a stop at 5380

5380/5330 Should be treated as ‘No trade zone by

Both long and short traders

Long term investors ‘ no bottom fishing’ till 5310.

Long term buying can be done between 5280 and 5330

In a staggered manner.

Best way is to ‘Wait and Watch’ from side lines

There will be lot many opportunities to buy.

COMMENTS

This market is neither traders market nor investors

 Paradise. Intra day volatility and uncertainty is

So high, that you are always on loosing side. Only long

Term Bears or Short traders are getting day to day

Opportunities to earn.

Nifty has broken important support at 5500 and is

Waiting to break 5480/5420.

Once Nifty is below 5420 then the chances of taking

Out 5310 will be very high, because then, Nifty moves

Down the significant trend line, leading to 5177 low.

 It looks we are headed for lower lows, and will test

5080 in coming weeks,

Falling Commodity prices

Falling Crude oil prices

Positive election results for UPA

Heavy short built up

Are the only possible triggers to stop markets

From falling further.

While

Global slow down

Rising $ Index

Government apathy in policy execution

Inflation

And

Fear of further rise in interest rates

Are the dampening factors for any up move

The balance is tilted towards down ward journey

Than, an up move.

It looks we market will be moving side ways with

A ‘Negative Bias’ till

Indications of Good Monsoon’

Next quarter (Q1) results

Some policy announcements from Government

and

Effect of lower commodity prices on Inflation, is seen

Stock Specific

Better restrain from fresh positions

Can Trade or position in

HUL

ITC

Colgate

Sun Pharma

Ranbaxy

Federal Bank

Federal Mugal

Ador Fontech

Polaris

NIITTech

GE Shipping

Arvind

Bata

Suzlon

BOSCH

IMPRESSION

DEPRESSION

Thanks

 Dr. Vasant Bele

All the views are personal, invest with caution and

After consulting experts