Dear Investors
It was ‘Global Effec’ and ‘side effec’ of the news about Maran and
Anil Ambani’s involvement in 2G ‘Ghost’ pulled Indian
Markets to lower levels of the range 5500/5600.
Markets opened weak on overnight news from US regarding
Weak economic data,(Jobless claims, Housing, Consumer Index)
Along with European fears of default on debt. Nifty lost around
60 points and sensex 180 in early trade but as trading advanced
It recovered to fall again during the day due to the news of
Involvement Minister Maran and ADAG’s Anil Ambani in 2G scam
To the support level of 5550
It was across the large caps from Auto, Banking, and Capitol goods
Metal and ADAG group stocks lost few points while FMCG and to
Some extent IT helped maintain markets at a respectable
Level of 5550
Data for the day
Indices
Open: 5529(18425)
High: 5568(18540)
Low: 5521(18390)
Close: 5550(18494)
Advance Decline: 1184:1659
Turnover: 85000cr
Gold; 1530$/OZ
Silver 34.20$
Crude 99$/Br
$ Index74.45
Global markets like US and European CAC/ DAC along with
What Next
Indian markets were resilient and sustained the ‘Global Effect’
With reasonable fall, towards the support levels. It was added
By the domestic news flow, which caused nervousness during
The day but markets recovered with strength to close at respectable
Level. It seems that 5600 is acting as a strong barrier, and traders
Are opting to book profits at every higher level. Now market needs
A ‘Trigger’ to move past these barriers of 5600/5620 to come out
Of the correction till that time it will be moving in technical ranges
In coming week some of the events like EGoM on oil and Gas, RBI
Meeting and Monsoon will be responsible for market’s moves
One can not ignore factors like Europe and US QE2 fate also
All in all we will be going through ‘Eventuality’ in next few days till
That time let us follow technical levels
.
Levels to Watch:
UPWARD: 5585(18621)/5618(18709)/5640(18796)
DOWNWARD: 5515(18390)/5480(18260)/5420(18033)
Technical view:
Pivot at: 5546(18474)
Nifty has moved above short term averages like
5 DMA @ 5502(18330) and 5 Day Exp. Aver. @ 5529(18419)
20 Day Expo @ 5518(18394)
And has closed near 40Day Expo are. @ 5560(18542)
Next resistance is @ 5585 which is 200 Day Exponential
Average and near 100DMA @ 5586(18630) .
Unless Nifty moves these and close above 100 Day Expo
Average @ 5619(18735) it will not be out of danger of falling
Back to the lower levels.
On downside supports are 5521(18390) and 5502 (5DMA)
5480 and 5420 will be the key support to be observed. As
Long as Nifty is above these levels it has got chance of
Bouncing back to 5600
In case of closing below 5380 market will be heading for
A panic fall to the lower levels of 5310/5177
Market Strategy:
Wait for first half an hour
Trade according to the trend
Have small positions and Book profits at every higher
Level.
Do not create shorts as long as Nifty is above 5500
All long positions should have a stop loss at 5480 and
A target 5620
5586/5620 should be ‘No trade zone’
Fresh shorts can be created at and above 5620 with
A stop loss of 5650 and a target of 5480.
Long term investors should wait for fresh allocation
Of funds till trend gets settled or there is panic fall.
Stock Specific
It is suggested to avoid
Auto/Metal and Bank sectors for the time being
HUL
ITC
Clogate
Lupin
Sun pharma
Ranbaxy
Bharti
Idea
R. Com
Zee Entertainment
Lovebe Lingeri
Talwalkars
V Guard
VIP
Ador Fontech
SPIC
Sharp Ind.
Sintex
Patel Engg.
Are some of the stocks where positions can be taken with
Strict stop loss,
COMMENTS
Even though all the ‘negative’ domestic factors are discounted
In present valuations ‘Global’ factors are not allowing Indian’
Market to move on expected lines. Unless we are on our own
‘Strong feet’ with Improved Inflationary conditions, Rate stability
Improved Growth and Strong Governmental support, we
Will be pressed by, External Factors’. Indian valuations are
Attractive, but the environment is not supportive for FIIs to
Pump money, DIIs to stop selling in and Retails re- enter
Indian markets.
All in all environments is not conducive for long term investments
Till the situation gets stabilized, till that time one has to ‘Flirt’
With the markets.
Let the events get over and Government start acting along with
Good monsoon add to the favorable valuations then and then
Have long term investments.
IMPRESSIONS
HELPLESS
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution and
After consulting experts
(The delay in posting was due to ‘Domestic’ Power/Connectivity
Problems secondary to ‘Flimsy’ infrastructural state, getting disrupted
By ‘Pre Monsoon’ showers, Unless this improves how can we progress
Is the real question)
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