Panic on Dalal Street

Dear Investors

Dalal Street had a ‘Deserted look’ at 3:30; there were no signs of life

And investors and traders looked ‘Decapitulated’ by the news of

Revising the ‘Economic treaty’ between Indian Government and

Mauritius, in early part of the trading hours. The news was like a

Tsunami and triggered a ‘Panic Situation’ in minutes on Dalal street

Leading to fall in Nifty to the low, since Feb 11 at 5195.It was all

Round fall with high volume. Irrespective of some encouraging

Corrections in the news, markets never recovered and closed

With a loss of 108 points in Nifty and 363 points on Sensex. At

5257 and 17506 respectively.

Data for the day:

Indices

Open: 5372(17925)

High: 5377(17925)

Low: 5195(17414)

Close: 5257(17506)

Advance: Decline: 554:2286

Turnover: 1, 80,000cr

Gold: 1542$/oz(22650)

Silver: 36.07$/oz(53792/kg)

Crude: 63.2$/brl

Dow: +76(12080)

S&P: +6(1278)

All the Asian and European markets were down except Japan’s

Nikkei

What next

Dala Street was ‘Rocked’ by the news leading to a ‘Decapitulation’

Of traders. Some modification in the news tried to ‘Dress’ the ‘Brutally’

Injured traders during the trading hours but still dalal street was ‘Bleeding’

At the end. Number of attempts were done to stop the damage but it looks

Difficult, to control the ‘Sentiment’ in near future. Only thing to be seen is

How far down the lane it will move in coming days? Nifty touched the

Sub 5200 and bounced above it. The Feb 11 Intra day low, 5177, looks

Likely to be under threat. As written in ‘Monday’s blog, (‘Bruised

Sentiment’) Emasculated traders and investors have no strength and vigor

to lift market to some strength. One has to go by the Falling Technical levels

as a hope of getting some support at some level

Levels to watch:

UPWARD:5310(17728)/5350(17900)/5420(18060)

DOWNWARD: 5220(17480)/5177(17296)/5090(16970)

Technical view:

Pivot at: 5276(17581)

Nifty has violated the important level of 5200(Intra day)

And closed below 5300.

Nifty is below all the short term and long term ‘Moving

Averages indicating a near term as well as longer term

Weakness

Unless Nifty moves above the resistance of

5 Day Exponential average @ 5369(17881) and

10 Day Exponential average @ 5421(18054)

It has no chance to avert, temporarily, the down fall in

Coming days, in that case if fall continues it will have

Some support @ 5177(17296) which was intra day low

On 11 Feb 11 , FROM WHERE MARKET HAD STARTED

THE CURRENT RALLY

If 5177(17296) is taken out on closing basis then Nifty has

A strong support at 5050(16800)

Market strategy:

No fresh trades in first hour

All existing shorts should have a stop loss@5240 and

A target at 5177.

One can create ‘Intra day’ longs with a stop loss with a stop loss

At 5177.

Fresh shorts can be created at ‘Every rise’ up to 5480/5500.

No ‘Buy on Dip’ is advisable unless Nifty settles at some

Level during next few trading sessions,

It no more a ‘Buy on Dip’ market, on the contrary it is

‘Sell on every rise’ situation

Stock specific:

Avoid large positions and keep strict stop loss at Nifty levels

ITC

Colagae

SBI(around 2020)

ICICI Bank(around980)

Dabur

BOB(around 850)

Canara Bank

Zee

Bhaeti

Tata Motors

Ranbaxy

Lupin

Idea

Dish TV

Indsind Bank

Yes Bank

Ind swift lab

Sharp Ind.

Sumeet Ind

Arvind

Nelcast

Ador Fonrech

SPIC

ACE

Charterd Capitol

Ahalcon Parenterals

Sun pharma recent advance

Hind Zinc

V-Guard

Delat corp

These can be bought for the bounce in coming days.

One can buy in small lots to be added at every fall in

Days to come

COMMENTS.

The ‘Boat is already Rocked’, now to see how far the damage

Can be averted in coming days or haw far one can repair it to

‘Sail back’ in the stormy sea. Once again it was Unconfirmed

News (‘Source base, un- confirmed and non - supported by Authority’)

Caused ‘Havoc’ on dalal street. It is the compelling desire and

Competition of Media to publish first, the ‘Breaking’ (unconfirmed)

News, which  is responsible for devastation in markets (Read the previous

Blog). Media players should asses the effect of possible ‘DAMAG’by the

news before it is ‘BROKEN’ in electronic media. Let us hope the

Authorities will understand the pain behind the damage and take due

Care next time.

( always a 'damaging news')

As far as markets are concerned, one has to watch passively, how far

And how fast the damage is controlled by the ‘Governmental’

Authorities, by explaining, the details regarding the Treaty. Unless

some concrete details are known and clarity on the details of the

‘Treaty’ are published markets will not be in a state of taking any

 more positions

Traders and investors are advised Not to Panic at the first exposure

Of any news item in Media, wait till the ‘Hype’ is over and

Authentic’ details are known and then take positions, out of ‘Ten

Times, Nine Times’ you will be saved. All these ‘Breaking news’ items

Break your confidence and nothing else

Traders and investors are advised to  ‘Wait on side lines’ or ‘Go

For a ‘Monsoon Ride’ on Mumbai-Goa’ high way (It was suggested

In one of the blog).

IMPRESSION

       

KICKED( By........

Thanks

Dr. Vasant Bele

All the views are personal and are not intention to hurt any one

Please invest with caution and after consulting experts.