Monday 27th June11
Dear Investors
Market was waiting for a small trigger to push itself in an
Upward momentum. Positive global news, Greece
Fall in crude prices and Meeting of EGoM(Empowered Group
Of Ministers) for policy decision on Oil prices, were more than to
Enough for a ‘Thumping Recovery’ from weekly low of 5196
On last Monday.
As stated in last blog, real pull back from a 500 points (Nifty)
fall over a period of time needs to be at least 100/150 points
of Nifty.
Friday’s rally has surprised every participant in markets. Week
Had started with an intra day low of 5196 and Nifty moved
In a range of 5240/5330 all through the week till Friday. Market
Analysts never expected the ‘Turnaround’ so fast and fierce.
Nifty gained 151 points to close above important resistance of
5450 at 5471, so also sensex gained 513 points to close above
18000 at 18240
All sectoral indices were in green and volumes were very high.
Data for the Day
Indices
Open: 5343(17804)
High: 5477(18268)
Low: 5343(17804)
Close: 5471(18240)
Advance Decline: 1984:852
Turnover: 2, 15,000 cr
Gold: 1502$/oz (22194/10gm)
Silver: 34.64$/oz (51857/kg)
Crude: 91.2$/brl
Dow: -115(11934)
S&P:-15(1268)
Most of the global markets were in green or flat
What Next:
As expected, a small trigger was required to corner the Bears,
It was not coming, at last the Global and Local news
Supplied the necessary fuel to move markets to some
Respectable level. Looking at volumes, it is not only the
‘short covering’ which is responsible for the rally but data
Indicates that there is addition of substantial long positions.
This is most encouraging.
All depends on how far this rally gets stretched or it becomes
a day event only.
Volumes and buying by FII suggests that it is a sustainable
Rally, still one can not afford to be ‘Complacent’, but has to be
‘Cautiously Optimistic’, as long as certain ‘Fundamental’
Hurdles are in the way and Technicals does not suggest
that we are out of ‘Corrective’ phase, one should take this
rally with a ‘Pinch of Sault’ and watch the developments
around India
for positioning in during coming week
Next week is the ‘Expiry on Thursday’ so it can increase
the volatility to great extent
Levels to watch
UPWARD: 5499(18300)/5517(18404)/5569(18547)
DOWNWARD: 5420(18080)/5380(17888)/5310(17728)
Technical View
Pivot at: 5430(18104)
Nifty has closed above 5DMA @ 5299(17463) and
5 Day Exponential average @ 5369(17463), indicating
A positive bias in near term
Nifty has closed above 10 DMA(5381) and 20DMA(5455)
In coming week it will face
Resistance @ 5515(18388) and 5569(18497) which is
100 DMA and 200 Day Exponential average.
Once Nifty breaks above these levels it can move
Towards 5601/5630 levels where it will face stiff resistance
And profit booking
The support levels for Nifty are
5420/5380 AND 5310 If Nifty moves below 5310(17770)
It will slide to the recent low of 5196 and 5177(17296).
Any close below 5328 should be taken as resumption
Of down trend.
Market Strategy:
-Avoid going short at given levels
-All existing longs should have stop loss at 5380
-Fresh long positions can be created up to 5420 or
Above 5517 with a target of 5568 and a stop at 5380
-No long term buying is advised at this stage because
Market is in no man’s land zone
-All positions should be covered before expiry
Stock Specific:
RIL
ONGC
INFOSYS
HCL Tech
Hindalco
L&T
Ranbaxy
R.Com
SBI
ARSS@445 KFA@39
Spice Jet@32 Punj Lloyed@65
Praj@71 Sumeet Ind.@36
Essar Port@98 Celestial Lab@32
HDIL@161 Parsvanath@45
Tilaknagr Ind@40 SPIC@28
Arvind@75 Talwalkar@255
Lovable Lineri@286 Tecpro @245
Sujana Tower@39 Ind
Yes Bank@298 Indusind Bank@266
Ramkey Infra@260
COMMENTS
Next week will be the week of ‘Make or Break’ for Indian’ as
Well as Global Markets. There are number of events taking
Place which can affect Indian markets to great extent.
Like
Government Actions:
Even though Indian Government has taken one step forward
On policy front it is a very small step, Government has to work
Hard on number of issues like……….
Inflation
Interest Rates
Growth
Capital Expenditure on Infrastructure
FDI In retail, Banking reforms
And
Expiry on Thursday
On Global front:
-Even though ‘Greece
Problem is far from over and may surface at any moment.
-As far as US is concerned what after QE2 a big question is.
Will US
What will happen to Commodity Prices?
QE2 had helped raisin equity prices and Liquidity in system.
What will happen to Interest Rates?
-US
ISM Manufacturing number data on Friday
Monthly Auto sales
Consumer spending data and consumer confidence Index.
Pending Home sells data
Weekly jobless claim and PMI on Thursday
Are important for US, and Global markets.
All in all nothing has changed drastically, in a day, so as to think
that we are out of woods
One has to keep watch on developments around the world
Before making long term commitments.
IMPRESSION
EUPHORIC
Read Next weeks market commentary as a separate article
Thanks
Dr.Vasant Bele
All the views are personal, invest with caution and after
Consulting experts
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