(Bulls) 'Relay Rally'

Dear Investors

On Monday market ‘Relayed’ the rally, started two days back

 on third successive day to move Nifty beyond 5500

 It was supported by

Oil and Gas primarily along with Capital Goods, Banking and

To some extent by IT majors. Declining crude prices and

Indian Governments decision on Oil and Gas policy lifted

The sentiment of traders and investors to take markets at

 Markets beyond 5550(18400) and to close at 5526 with very

 Good volume and high turnover

Data for the day

Indices

Open: 5441(18132)

High: 5552(18494)

Low: 5434(18132)

Close: 5526(18412)

Advance Decline: 1654:1216

Turnover: 1, 77,000 cr

Gold: 1501$/ox (22084/10gm)

Silver: 33.58$/oz (50549/kg)

Crude: 90.6$/brl

Dow: +108(12042)

S&P: +11(1280)

Asian and European markets were mixed

Nikkei closed marginally green while Hang Sang in red

FTSE in green and DAX in red

What Next:

It was Government’s one step forward on policy front, boosted

The sentiment in market. Nifty has moves beyond 5500 and

Maintained the level on closing basis. This is a good sign for

Markets to ‘Relay’ further to important psychological level of

5600. FIIs and Mutual Funds were net buyers for last three

Days. Global markets are stable and there is no negative

News except some restructuring of ‘Cairn- Vedanta’ deal.

In such scenario it is interesting to see how far this ‘Relay’

Succeeds to move towards main short term target of 5600.

Levels to watch

UPWARD: 5563(18544)/5598(18960)/5620(18700)

DOWNWARD: 5503(18330)/5456(18198)/5380(17980)

Technical View:

Pivot at; 5504(18346)

-Nifty has closed beyond short term moving averages like

 5 Exponential average@ 5456 and 20DMA @ 5458 and

50 Day Exponential average @ 5503

This indicates that the short to medium term trend has

Turned in to Positive,

-The next resistance will be @ 5539/18470(100DMA) and

5563/18560 which is 200 Day Exponential moving average.

-Once Nifty closes beyond this then the next stop will be at

 A vital psychological barrier of 5603/ 5622(18700). Nifty

May face selling pressure around these levels and fall back

-To the support levels of

5503(18300) 5480(18198)

-To maintain the current rally Nifty must not fall below 5478

 And 5450(18168)

 5450 will be important level to watch as a downside support.

Market Strategy:

-Carry existing long positions with a stop at 5478 and a

 Target of 5603

-Fresh long positions can be created at all dips with a stop

 At 5480

-Buy all the dips up to 5450 with a stop at 5420/5380

-No trades should be initiated on long side between  in a

 Zone of 5603-5622. Treat this as ‘No trade Zone’

-Cover all shorts if Nifty moves beyond 5526 after first

 Half an hour

-Fresh shorts should be avoided as long as Nifty is above

 5503/5480 levels

-Fresh shorts can be created once Nifty is above 5598

 With a stop loss of 5530

Stock Specific:

RIL

Axis Bank

ICICI Bank

Colgate

Power Grid

Ranbaxy

L&T

Sterlite

Hindalco

M&M

Maruti

HDIL@157              PFC@183

E. Kanto@85           Gati @61

Fortis @156             Ador Fontech@121

ACE@47                  Tata Motor DVR@532

Uni phos @154        BOSCH @ 6900

Central Bank@119   Federal Bank@449

Talwalkars@249       Lovable Lingeri@289

Hind Zinc@133         IPCA Lab@328

Blue star @298         Delta corp @96

Keep a stop loss 3 to 5% down or at Nifty level of 5440

COMMENTS

Monday’s move in market has given some relief to the

Traders and investors, it looks like 5200 is acting

As a strong support to the market in near future. Unless

Some thing drastically changes ‘Globally or Locally’

This expiry on Thursday may see a close above 5600.

All depends on how far FII and Domestic institutions

Put their money in cash market.

As stated in Monday’s blog , ‘Nothing has Cahnged’Fundamentally

Drastically so as reverse the trend from bearish correction

To bullish up move. One can say that there is a change in the

Intentions of India Government, but change in intention should

Get converted in to ‘Action’ on policy front.

Near term RBI policy, Monsoon and Policy decisions will decide

The trend of markets and Growth projections. Global Effect is

Getting cooled along with Oil and Commodity prices.Greece is

Trying to settle and US markets are waiting for the data.

All in all,as written in last Blog

Traders are advised to take the advantage of the changed

Situation but with A ‘Pinch of Sault’ and be ‘Cautiously Optimistic’

Than to be Euphoric.

IMPRESSION

RELIEVED

Thanks

Dr. Vasant Bele

All the views are personal, invest with caution and after

Consulting experts