Stock markets after going through a painful first half of the trade,
Scored in ‘Mandatory Hour’, to get in to green. Nifty was moving
Around 5480/5500 range during first half of the day, Number
Of large cap stocks changed the gear of market in last few minutes.
It was HDFC Bank,L & T, ICICI Bank,ACC,Infosys,TCS,and few
Pharma counters helped Nifty to close above 5500(5532).
Volumes were low and broader market was in negative breadth.
Lingering effect of US economic data and fear of Euro zone default
kept traders out of trades. It was a ‘Reversal part II’, Friday was
Exactly the opposite show, markets closed down after remaining high
During first hours of trade to loose all the gains in ‘Mandatory’ hour
Today was exactly the reverse show.
Data far the day
Indices
Open: 5504(18344)
High: 5542(18458)
Low: 5479(18258)
Close: 5532(18420)
Advance Decline: 1294:1453
Turnover: 84000cr.
Glod: 1544$/oz(22500)
Silver: 37$/oz(550000
Crude: 99.2$/brl
$ Index 73.2
European markets were down
Number of Asian markets were closed while remaining
closed in red
What Next
There is no change in and around India
Negative breadth indicate lesser participation and nervousness
In market. People are not prepared to take risk, as long as things
Get cleared. Sector rotation is keeping indices in a range bound
State. There is some buying in mid cap stocks. Traders and Investors
Are not in a mood to take positions beyond the day
There are no triggers, either positive or negative, in sight
To change existing scenario.
In such an uncertain environment it is ‘Difficult to Trade’, so
As long as ‘Fundamental’ situation does not improve, we have to
Move along the line of ‘Technical Levels and Cues’
Levels to watch:
UPWARD: 5556(18523)/5589(18740)/5619(18699)
DOWNWARD: 5493(18299)/5440(18110)/5380(17929)
Technical View
Pivot at: 5517(18378)
Important technical development is
50 Day Exponential average @ 5570(18570) is less than
200 Day Exponential average @ 5583(18615), and Market
Is trading below both the indicators, Technically this is a
‘Bearish’ sign
Any up move will face resistance at 5550 (18480) which
Is a 5DM, unless Nifty moves beyond 5583(18615), 200
Day Expo. Aver. it will be facing difficulties to move above
5600 and will correct to the
Supports at: 5480(18700), 5420(18077) levels, once
Nifty moves below 5380/5330 band, market
Will enter in to a ‘Bear Trend’.
Levels for the day; 5583/5440
Market strategy:
-No trades for first half an hour
-Trade the trend
-Keep hourly stop losses
-Keep booking profits at shorter intervals
-Do not carry trades for next day
-All shorts should have a stop loss at 5583
-5580/5630 should be ‘No trade zone’
-Fresh shorts can be created at current level
With a target of 5420 and stop loss at 5600.
-Fresh long positions can be created below with
A stop loss at 5440 and target of 5617
-Long term positions should be avoided
Stock specifics
ITC
HUL
Colgate
ICICI Bank
RIL
R.Com
Sterlite
Dr. Reddy
Sun pharma
Ranbaxy
Biocon
Yes Bank@298
Federal Mugal @ 259
Everest Kanto @ 90
Repro Ind.@118
Ecoplast @40
Elgi Equipment@81
Indswift lab@103
V-Guard @218
SKF @ 621
Keep stop loss at 3 to 5% lower levels
And do not carry trades in large cap stocks
COMMENTS
There are number of events which, in short term,
Will influence market direction
EGoM
Monsoon progression
RBI Meeting
Tonight’s Federal Meet and on 22nd June
EGoM: Uncertainty regarding group of ministers meeting
In relation to Oil and Gas policy is getting postponed frequently.
This has kept markets nervous regarding Governments ability
To take strong decisions
Monsoon has started earlier and is progressing well all over the
Country, leading to the expectation of ‘Food inflation’ getting
Reduced in near term
RBI Meet on June 15th: Clouds of rate hike are gathering on Indian
Stock markets
Only question is ‘How much’ rise 25bps or 50bps?
This discussion and the stance of RBI on tackling Inflation or Growth
Is keeping markets nervous
Federal Meet to discuss QE2 and Possibility of QE3:
A variety of recent reports have showed that the us Economic recovery slowed
in May, and given that the Federal Reserve's $600 billion stimulus runs out
Later this month, investors are especially jittery about the strength of the
Economy, going forward
"There's a sense that liquidity has helped the market a lot more than it has
Helped the economy, and once the liquidity is taken off there will be
Slowing of growth and possibility of Recession
(QE2: Quantitative easing, second, it was the stimulus package given
By Federal government, it will be withdrawn by June end).
All the above things are keeping markets, all over the world, in a state
Of ‘Waxing and Waning’ in a range bound trade with a ‘Negative Bias’
Along with all the above major events, there are number of smaller
Events, Like ‘Ramdeo baba event’ markets ‘Vacillating’ between
‘Hopes and Disappointment’
So one should trade with one eye on prices and another on
Developments, around the world.
IMPRESSION
VACILLATING
Thanks
All the views are personal, Invest with caution and
After consulting experts
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