Day of (RBI) 'ECLIPSE'

Dear Investors

A day of nervous trade with a negative bias took markets

To the lower level of the range 5450/5650

After opening soft markets slowly drifted to he lower levels

Of 5438 and closed at 5447, just below 5450

Majority of the sectors were under pressure, Financials, Realty,

Metals, Oil and gas,Telecom,power, Cap goods and Cement.

Large caps like RIL, SBI, ICICI Bank, L&T, Infosys, tumbled

During the day, HUL.ITC.Tata Motors and Hero Honda helped

Markets from going down to 5400

Global markets, too, were under pressure of Greece effect leading

To a wide spread fall in Asian and European markets.

Data for the Day

Indices

Open: 5494(18298)

High: 5499(18308)

Low: 5438(18111)

Close: 5447(18132)

Advance Decline: 1204:1681

Turnover: 90000cr.

$ Index75.1

Gold: 15.31$/oz (22450/19gm)

Silver: 35.1$/oz (53370/kg)

Crude: 98.7$/brl

DOW: -178(11897)

S&P:  - 22(1265) (vital support at 1250)

What next

Early effects of ‘Lunar Eclipse’ (RBI Eclipse) caused ‘penumbra

(Shadow) on the markets, it has to be seen if this RBI Eclipse

Causes ‘Umbra’ (darkness) on Indian economy and markets

Tomorrow, as far as Investors are concerned real ‘Lunar Eclipse’

Will be tomorrow. Trades will be divided in two distinct parts, on 16^th,

Pre policy and post policy, Traders and investors should hang on

Till the policy is out. Depending on ‘Mr.Subbarao’s rate hike

And language of the ‘Economic commentary’, markets will respond.

It may move beyond short term technicals, on either side, so one has

to be very careful in creating any positions in market. Technical levels

Should be used to; decide exit and entry in markets.

Levels to watch

UPWARD: 5484 (18256)/5535(18447)/5598(18660)

DOWNWARD: 5438(18100)/5380(17900)/5328(17780)

Technical view

Pivot: 5461(18183)

Nifty has closed below all the short term averages like

5 DMA (5491/18284)20 Day Expo.(5504/18335)

Any up move will have resistance at 40 Day Expon.ave.

@ 5535(18447).

As long as Nifty remains below 200 Day exponential Aver.

@ 5578(18597) and 100 Day Expo @ 5598(18660) it will be

Under pressure of selling at higher levels.

Support for all the down moves is at 5480(18230) and

5400(17986).Once Nifty moves below 5380(17900) it may

Fall to the recent low @ 5328 on May 25^th. Which will be the

Last hope for Bulls to bounce back.

Market strategy

Dow is down by 178 (below 12000)

S & P is down by 22 (below 1270)

And

RBI policy after 11 AM

-No fresh positions before policy.

-All short positions can be extended up to 5578

-Fresh shorts can be added with a stop loss at 5578

-No fresh long positions

Stock specific

Use the possible ‘Gap Down’ opening to have

Small trading positions in

FMCG: HUL,ITC,Colgate, Dabur

Pharma:Sun pharma,Lupin

Telecom:R.Com

One can buy mid cap stocks in selected manner at every

Fall up to 5328

Ipca Lab (340)

Blue Star (322)

Sharp Ind. (65)

Celestial lab (36)

BOSCH (6900)

ACE (45)

Elecon Engg. (68)

Arvind(78)

V-Guard (220)

Lovable Lingerie (378)

Sumeet(37)

Gati(61)

Tainwala Chem. (35)

Bartronic(660

Ind swift Lab (95)

Petronet LNG (140)

Globus spirit (148)

All these stocks are, for positional trade (5 to 15 days) as well

as for long term investments, depending on Nifty levels

One can add at panic falls up to 5310.

COMMENTS

India markets will under the effect of ‘Global weaknesses’

In early part pf the day and later it will be under the

Effects of ‘RBI Eclipse’ All depends on how far Mr.

Subbarao increase the rate and how ‘Hawkish’ he is in

Interpreting, Inflation, Economy and Growth

Previous rate hikes have not brought Inflation under control

It is to be seen whether Mr. Governor is still of the opinion

that Indian Economy needs tightening, if so then  markets

Will have to face ‘Capitulation’ by two swards..............

Global threats,

 Greece and other Euro zone default

 US slow down

And

Local effect of rate hike leading to

Rising rates leading to slowing down of the growth

Difficult credit situation for industry

High cost of borrowing and labour

In such a scenario Nifty is likely to break the barriers of

Range 5400/5600, and move down to sub 5300 level.

All depends on

Number 25bps or 50bps

If 25 bps is the number by magician Mr. Subbarao, markets

Will bounce, at least ‘momentarily’

If the number is 50bps and language is harsh, markets will have

To face the ‘Guillotine’ effect.

Let us hope that the ‘Rate Eclipse’ will not cause ‘Umbra’ (darkness)

 In market and economy which is already under the ‘Penumbra’ (shadow)

 Of Global and Local events

IMPRESSION

SCARRY

Thanks

Dr. Vasant Bele

 All the opinions are personal, invest with caution

And after consulting experts