Lingering Fear

Dear Investors

Markets opened higher and continued to move higher till it

Crossed 5300. The Nifty and sensex rebounded from

Yesterday’s fall on the back of relief from ‘Greece Fear’ but

‘The Lingering Fear’ of the ‘Mauritius Treaty’ snapped the

Morning gains leading to profit booking and fresh shorting.

At the end markets closed in green with small gains in

Number of large caps like TCS, RIL, HDFC, NTPC,SUN

PHARMA and Axis Bank, Infosys, Bharti Tata Motors also

Gained to close in positive territory. However banking majors

Like SBI and ICICI Bank ended the day in negative. Volume was

Less and breadth was negative.

Data for the day:

Indices

Open: 5280(17574)

High: 5322(17714)

Low: 5257(17504)

Close; 5257(17504)

Advance Decline: 1125:1667

Turnover: 1, 25,000cr

Gold: 1544$/oz(22659/10gm)

Silver: 36.20$/Oz(54350/kg)

Crude: 93.2$/brl

$ Index: 75.6

Dow: +109(12190)

S &P: +17(1295)

All the global markets traded in green.

What Next

Nifty has closed below 5300 which is important psychological

Level. Bulls tried to take markets to higher levels but failed to

Maintain due to profit booking and fresh ‘Bear Hammer’

 Now the main question is wheather market will drift down or

Get consolidated in a range of 5250/5450. For markets to scale

Higher levels than 5400 will require fresh buying from FII and

Retail individuals. In Given scenario it looks difficult that fres

Mone will come to the market , till that time it will be moving

In a ramge with negative bias. As long as there is no change in

‘Ground realities’ one has to go by technical levels.

Levels to watch

UPWARD: 5315(17750)/5356(17850)/5420(18060)

DOWNWARD: 5220(17400)/5177(17296)/5090(16800)

Technical View

Pivot at: 5170(17592)

Technically markets has become week due to its falling

Below all the short and medium term moving averages

Immediate resistance will be at 5315/5350, unless Nifty

Moves beyond 5450 it will face lot of pressure at every higher

Level.

Once Nifty moves beyond 5515 then and the fresh longs will

Be built till that time bears will have upper hand on market

To change the trend from down to up Nifty will have to cross

5630/5710 on closing basis , which looks a distant possibility.

The only worry is markets entering in ‘Bear Phase’

Once Nifty moves below 5177, which is last intra day low on

11^th Feb.11, then there are hardly any supports up to

5090 and a breach of 5000 will take markets to longer term

‘Bear Phase’

Market strategy:

Keep cool and wait for long term investments

Bears can create short positions aggressively at every

Higher level up to 5515.

Aggressive traders on long side should keep stop loss

For long positions at 5220 and book profits at regular

Intervals

It is not advisable to carry forward positions for next day.

No investment buying is advised

Stock specific

One hast exercise caution in creating positions un

Stocks which were moving against the trend like

HUL

ITC

Bharti

Tata motors

As market start falling thses stocks may feel the heat

So better book profits in these counters and wait to

Create long positions in any of the counters

Better avoid long term buying in mid and small cap stocks also.

COMMENTS

The next move in market depends on the global news flow

And what happens to the Indian Macro Environment, Inflation,

 Intrest Rates, Economic Growth and Policy execution by

 Indian government.

Unless there is a change in fundamental situation it is hard

To get fresh money in markets either via FII/DII and retail

Long term investors. Globally, US/Europe and China

Economies are facing lot of problems, like slow down in

Growth, inflation and possibility of rate hike, while Europe

Is struggling on debt front US economy is reeling under

Bad Housing and Job data. It has to be seen how federal

Chief Barnanke tackles the problem of QE2 and QE3.

Termination of QE2 will have lot of effect on US economy

While QE3 will affect emerging markets and economies.

In addition to Global factors one has to see how Indian

Government tackles the Inflationary pressures, Disinvestment

And Corruption problems, all these are ‘Humanly Governed’

Factors and Errors, the control of which lies in the hands of

‘Governors’ of situation, the only natural factor which will have

Great effect will be ‘Monsoon’, let us hope at least it will not

Disappoint markets like Indian Government, Bur crates and

Politicians.

The only thing which we can do at this moment is, prey God

to give some strength. to the ‘Paralyzed Government’

IMPRESSION

DISTRUST and FEAR

THANKS

Dr. Vasant Bele

All the views are personal, invest with caution and after consulting experts