Bruised Sentiment

Dear Investors

Indian markets ‘Running down’ the supports continued on Friday

After opening above 5400/18000 levels markets started sliding down

On the fear of Greece Default, High Inflation and Interest rate fears.

Nifty touched 5355 to recover slightly and closed at 5366. Day by day

The ‘Fundamental’ worries from US, Euro zone and Indian domestic

Economy is a cause of ‘Bruise’ to the sentiment of investors and traders.

Greece default, High oil prices, Inflation and the worry, What after QE2?

Is adding to the ‘Trauma’ to India markets. According to the recent

 developments in Euro zone , it looks that some compromised formula is

evolving to ‘Bail out Greece’

Data for the Day

Indices

Open: 5412(18060)

High: 5421(18064)

Low: 5355(17844)

Close: 5366(17870)

Advance Decline: 976:1946

Turnover: 1.10,000 cr

Gold: 1539$/oz (22600/10gm)

Silver: 35.87$/oz (53999/Kg)

Crude 93$/brl

$Index: 76.12

Dow: +42(12004)

S&P: +3(1271)

Europe was flat to green while Asian markets were down

What Next:

Developments at week end

Some compromising formula is evolving between Germany/France

And IMF (International monitory Fund) to bail out Greece

ADAG stocks are out of Sensex and Coal India and Sun pharma in

CCI (Computation Commission of India) has sent notices to 50 Sugar

Company’s chairmen explanation regarding ‘Cartelization’ (Price fixation)

In the light of the, present and past, developments around the world it

Is very difficult to predict which way the markets will move. As long as the

Environment is turbulent and uncertain one can not take long term positions

In markets. Daily volatility will be the trend in coming days. Daily traders and

Investors have to weigh their positions against the flow and effect of the

 events and news in and around India. The best way in such circumstances

 is to go by ‘The technical’ data

Levels to Watch

UPWARD: 5420(18100)/5455(18192)/5505(18300)

DOWANWARD: 5310(17728)/5250(17600)5177(17296)

Technical view:

Nifty is at a critical level. 5328(17786) was the low recorded on 25^th May 11.

From here Nifty bounced back to the levels of 5578(18928) to correct again

To 5355(17844) on Friday.

If Nifty moves below 5328(17786)5310(17728)(11^th Feb 2011 closing) then

There are hardly any supports , 5250/5220, towards 5177(17296) which was

Low on 11 Feb 2011.

There is every possibility that there will be a news base, bounce in early

Part of the trade tomorrow, to take markers to the levels of 5425(18069)

Which is 5 Day Exponential Average?

Nifty will face resistance at and above 5556(18527) which is 100 DMA

And at 5576(18600) which is 200 Day Exponential average

Only above 200 DMA @5757, one can say that the trend is changed from

Corrective rally to an up trend, below that Nifty will be facing selling

Pressure at all the higher levels

Market Strategy:

-One can go long with a stop loss@ 5310 and target at 5515.

  It is advised not to create shorts till Nifty moves above 5456

Or below 5300.

-Existing shorts should have stop loss @ 5480/5515 and a

Target of 5300.

-Long term investors should have stock specific approach

And invest in mid cap stocks at every lower levels.

Stock Specific

ITC

Dabur

HUL

Colgate

SBI

RIL

R. Com

Petronet LNG(143)

Blue Star(317)(224)

Sahyadri Ind.(57)

Jyoti Structure(88)

Spic (30)

Arvind(78)

Ind Swift lab(98)

Pacific Ind(180)

Sharp Ind.(67)

Ador Fontech(129)

Delat Coro(98)

ACE(45)

Elecon Engg.(69)

Gati(63)

Lovable Lingeri(367)

COMMENTS

Last weeks events and news flow has driven markets to a

Critical position. Unless something changes on positive side

It will be difficult for bulls to take markets out of ‘Bear Grip’

Nervous sentiment and fear of loosing more capital has

Unnerved the market participants leading to a stage of

E’Masculisation’ of the investors and traders. Events during last

Few weeks has taken away all the vigor and strength from market

Leading to a ‘Blown out’ state. Investors have no faith in markets.

To change all this in near future

There has to be change in

Fundamental situation, Inflation, Rates, Liquidity

Improvement in Global Situation, like solution to the Greece

Problem,

Fall in commodity and oil prices

Improvement in US economic data

Good Monsoon

All this is not a day’s game; it will take some time to reverse

the damage and move into conducive situation for investment

Till that time ‘Be patient’ and ‘Do not Panic’ keep your home work

Ready to enter in proper stocks at proper time

IMPRESSION

TRAPPED

Read market for next week as a separate blog

Thanks

Dr. Vasant Bele

All the views are personal, invest with caution and after

Consulting experts