'TRUDGING' (moving laboriously) market

                                                   ( 20^th June to 25^th June 2011)

Dear Investors

It was a week of events and news. Indian and Global markets are going

Through the days of Stormy whether. Clouds of uncertainty are becoming darker

All over the world, in India, local political problems are getting added to the

Global things. Indian investors are not getting out of ‘Bad Patch’ of last

Few months, Events are not allowing markets to get settled. Wee k saw

High volatility amidst eventuality like….

RBI Policy, rate hike

Greece Default and European developments

Lok Pal drama

RIL DGH Controversy

Inflation numbers

Postponement of ONGC FPO

Governmental Apathy on policy front

QE2 coming to an end and possibility of QE3 in US

All these things led to

Drying of flows to equity markets

Oil falling below 100$

$Index rising above 75

Silver and gold started falling

Commodity prices coming to lower levels

Retail investors moved away from stock markets

FII were net sellers

No buying in cash market by DII/Mutual Funds or FII

The result was….

Nifty could not mover higher and ultimately started falling day by day

Nifty swung around 165 points between high of 5520 and low at 5356

to close at 5366,loss of 119 points

At the end of the week Nifty closed below important psychological level

of 5400 and then near the support levl of 5328

There are around 300 stocks at 52 weeks low valuation

Mid cap and small cap were down more than 2%

Volumes were pathetic and turnover was least

RIL was at 2 1/2 years low

Dow was below 12000

S &P at a vital support level of 1250

Greece was on the verge of default

Traders and investors were not sure, analysts were confused and

Surprised to see that even though the valuations were compelling

There was no buying by speculators or investors, this has led

Indian stock market to ‘Drift’ near supporting levels during this week

Unless there is some change globally or locally Indian markets will be

Trudging (moving laboriously) to the lower levels in coming weeks

"The markets are not at all conducive for any buying at this point in time

It is a market where things are uncertain. We have been taking cues from

 the global events and things are far from encouraging on that count",

In short

The problems with Inflation, Interest rates, Greece, and a host of other

 global challenges have not gone away and can not be ignored.

Economically or politically any of these problems are potential

‘Economic time Bombs’ that could blow up any time

Now all depends on

Greece getting support from IMF, Germany and France

What happens to QE2?

Will U S President opt for QE3?

Crude prices?

Commodity prices?

Inflation in India

Government stance on

Oil and Gas price fixation, Fertilizer pricing, Infrastructure spending

And Corruption in every walk of life

Insurance and Retail reforms

And

MONSOON

All this will decide the fate of Indian and global economy and stock

Markets in India.

Either markets will bounce to the levels of 5450/5500 and stabilize in

A range or will drift down on fresh short and lack of buying by FII/DII

And retail investors.

Once Nifty moves below 5310 on closing basis, there is every possibility

That Nifty will test the lower level of 5177, on 11^th Feb 11(Intraday)

Below this level there is hardly any support to the Nifty,

And it may slip down to 5220/4950 range

Technical view

Nifty is at a very crucial support level. Week on week market is drifting

Down, to lower levels. The chart below shows that market is in a weekly

Down trend for last 12/13 weeks and every rise is sold off

Market strategy

No fresh buying is advised as long as Nifty stays below 5450 on closing basis

All up moves to be used to book profit or exit long positions till 5515

Fresh short can be created at every rise up to 5515 with a stop at 5557

Longer term investment buying can be done in small installments at all lower

Levels up to 5220, once Nifty is below 5220 no fresh buying is advised,

As long as Nifty is below 5605/5630 and 5757 it will be in a ‘Down Trend’

Stocks to Watch

ITC                       Ranbaxy            HCL Tech.

Dabur                   Sun Pharma      Abban Offshore

Coal India             L& T                              

Colgate                 BOB

ICICI Bank            RIL

Bharti                     Re. Infra 

                

Suzlon                                    SPIC

Punjlloyed                              Petronet LNG

Idea                                       GMDC

Sharp Industries                     Arvind

Sabero organics                    Deewan Housing

Camlin                                    HDIL

V-Guard                                 Delta corp

Godawari Power                    Indswift Lab

Jyothi Labs                             Repro India

Federal Bank                          BIOCON

Yes Bank                                IPCA lab

Lovable Lingeri                       Celestial Lab

Talwalkars                               United Phos

ACE                                         BOSCH

Elecon Engg                            NIIT Tech 

Pacific Ind.                               Ador Fontech

Bartronic                                 

All the above mention stock should be on your radar for long term

Investments as well for short term bounce i during next few

Days to week

Please read market for Monday as a separate article

Thanks

Dr. Vasant Bele

All the views are personal; invest with caution and after consulting

experts