limping TO Recover

Dear Friends

On Thursday Indian market opened flat on ‘Weak Global’ cues but

With the help of beaten down large cap stocks and ‘Oil and Gas’

Sector, Nifty could manage to move beyond 5300 and close above

That at 5320. Though Nifty, with some sectors and beaten down

Large cap stocks like, RIL, ICICI Bank, ONGC, TCS, INFOSYS and

 oil and Gas sector, managed to move beyond 5300

other major part of the market, inclusive of Banking and Cap. Good and

Telecom sector along with broader market was ‘Limping to Recover’

from last few days shock, indicating, that the so called ‘pull back’ has

weak legs to move further

 Nifty broke the 5250-5300 range to move beyond 5300 with a

Gain of 41 points to close at 5320, sensex too rallied by 176 points

 to close at 17727

Data for the day

Indices

Open: 5269(17526)

High: 5330(17754)

Low: 5252(17482)

Close: 5320(17727)

Advance Decline: 1159:1612

Turnovr: 1, 23,000cr

Gold: 1522$/oz(22400/10gm)

Silver: 36.1$/oz(52550/kg)

Crude: 95.41$/brl

All the Asian markets closed in Red except Shanghai

European markets were deep down in red

Dow: -59(12059)

S&P: - 03(1283)

What Next:

 Today’s weak recovery is a cause for worry, because it was

Based on few large cap stocks and oil and gas stocks moving

Higher on the news of EGoM meeting to consider oil policy.

Otherwise Global markets were in down move, Dow future was

In Negative and food inflation numbers were not encouraging. Most

Of the recovery was due to short covering, there was no fresh buying

In market leaders, like Banking and Technology while FMCG was subdued.

All this is suggestive of a ‘Nervous mood’ in markets.

Now all depends on EGoM meeting, US data (Jobless claim and

New house sell no.).Friday being the last day of the week, how

Far ‘short covering’ takes place, till the entire picture is cleared we will

Follow the technical levels

Levels to watch:

UPWARD: 5349(17826)/5378(17926)/5420(18068)

DOWNWARD: 5280(17500)/5220(17380)/5177(17296)

Technical view:

 Pivot at: 5300/17654

-Technically Nifty has closed just above 5 DMA @5315(17694)

 But is far away from 10 Day Exponential average @5363(17860)

 Which will act as first resistance

-This Pull back can take Nifty to the level of 10 DMA @ 5401(17983)

 Where it will face selling pressure or creation of fresh shorts.

-Support for Nifty is @ 5280(17550), 5220(17380) and 5177(17296)

 5177 may act as a strong support for Nifty (This is 52 weeks low)

 from where Nifty may have a  good recovery

-If 5177 (17296) is not sustained then markets will be at the risk of

Moving in to a ‘Bear Market’. With a new range of 4990/5100

-Watch the level of 5177(17296) on downside and 5515(18368)

 on up side for medium term

Market strategy:

-Global markets are weak; US markets are in deep red.

-Nifty will open with a ‘Gap Down’

-Do not trade during first half an hour

-Existing shorts can be carried as long as Nifty is below 5480

-Fresh shorts can be added if Nifty moves below 5177 on closing

 Basis

-Temptation of going long for an expected bounce should be

 Guarded by strict stop loss @ 5200 and below.

-Do not have bottom fishing; there will be opportunities in coming

  Days to weeks

- Best thing is ‘Book profits where ever it is’ and stay on sidelines

Stock specific

Adventurous longs after first half an hour

RIL

ICICI Bank

Axis bank

ITC

Dabur

HCL Tech

R.Com

LIC housing finance@218

IGL@346

Praj@69

Patel Engg.@135

Sharp Ind.@589

Sumeet Ind @34

Globus spirit @140

Arvind @69/70

COMMENTS:

Sentiment has been very poor this week and I don’t think people

 have recovered from the shock  of the last couple of days.

 So you could sense that people are not feeling confidant about

Today’s recovery. It doesn’t matter that a couple of stocks have given

Some support to market, but that aside, the broader market clearly

 has been sinking . So it’s tough to say how long we will stay above

5200/5300.Global and Local environment is not favorable for a

Solid up move or a substantial pull back.

 In a normal environment

Any big fall is always fallowed by a 25 to 30% pull back before next

Fall, but last few ‘pull backs’ have not sustained more than 5 to 10%

Rise and continued to fall in a day or two.

We have come down around 500 points (Nifty), from 5698 to 5192

In last few sessions without a convincing pull back any time. Every

Rise has been hammered by ‘Bears’ or by profit booking by ‘Trapped’

Traders. This is suggestive that market sentiment is at its worst.

Technically (and numerically also) 5177 is nearer (from existing 5300)

Than 5515/5550(which will be needed to be crossed to change the present

Down move in to an up move), small negative news will be enough to

Take Nifty to 5177 and below it while bulls will have there has to be

‘A flow of Good News locally and Globally’ to pull markets out of woods,

Which looks too much in given,’Global Economic’ environment, so we are

likely to fallow the path of least resistance in next few days to weeks.

With a rising inflation, rising rates, in ability of Indian Government

In policy execution and unpredictable Monsoon next few days look

Like to be very difficult for markets. Global environment is adding

Enough fuel to the ‘Pessimism’,

Ben Bernanke’s anticipation of slowing in US economy, postponement

Of QE3 and Europe’s debt problem is adding to all the nervousness

To the market conditions

All in all we are likely to remain in a ‘Bear Phase’ for some more

Time with wek pull backs at intervals.

IMPRESSION

EXHAUSTED

  Important FLASH NEWS : Grecce is getting bail out package

                                               EGoM for oil and Gas Today

Thanks

Dr. Vansant Bele

All the views are personal, invest with caution and after

Consulting experts.