Dear Investors
On Tuesday, trading fever took markets from lower levels
Of 5500 to close at the top of the day, 5556.Market opened flat
And moved in a small range till a sudden spurt at the end
Took it to higher levels of 5570, profit booking at the end
Brought Nifty to a support level of 5556
Heavy weights like RIL,Infosys,TCS,PNB,JP Associate,Tata steel
Sunpharma along with ITC, SBI helped Nifty to move substantially
High, above 5500. The yesterday’s blues, like HUL, L & T, ACC, Bharti
And R.Com were in a corrective mood. Volume was not encouraging
And breadth was not disappointing.
Data for the day
Indices
Open: 5509(18355)
High: 5570(18545)
Low: 5507(18351)
Close: 5556(18495)
Advance Decline: 1575:1281
Turnover: 98000cr.
Gold: 1546 $/oz (22670)
Silver: 37.21 $ (55800)
Crude 99.2 $ brl
$ Index 73.6
Global markets were mixed
What Next;
Tuesday was, a ‘Day of Shuffling’ of ‘Sectors and Stocks. Entirely
Different set of stocks, as compared to last few trading sessions,
Moved up on thin volume. The movement in ‘High Beta’ stocks on
Small volume and high prices was ‘Utterly confusing’ It looked like
To be a, ‘trading fever’, across the, high risk, mid cap stocks. The
‘Topsy-Turvy’ trading psych of traders kept market pundits ‘Guessing’,
What next?
As Nifty has closed at a crucial support level of 5556,
It has to be seen how far bulls can manage to push it towards the
All important resistance level of 5600, Data suggests that there is no
FII or DII buying in cash market, which makes investors rather
Suspicious about the progression of this pull back beyond 5630.
Global and Local factors, so also, risk appetite of the traders will
Decide ‘how far and how fast’ the market will move in next few
Sessions.
Till that time go with the trend and technical data.
Technical View:
Pivot at: 5544(18463)
Nifty has closed above 5DMA @5537(18441) and 20Day Exp. Aver.
@ 5526, in near term these are crucial supports for Nifty.
5583(200 Day Expo. Average) and 5598(40 Day Expo. Aver.)
Will act as strong resistance for Nifty’s move towards 5650,
(upper target of therange, 5420-5650)
Once Nifty moves above 5650, it will face resistance at 5710 and
5757(200DMA).
In case Nifty does revert from 5598/5600 levels, then major
Support is at 5505/5480.
Once below these levels Nifty may slide back to 5310/5177
Band.
Market strategy
Trade with caution
Have small trades
No fresh shorts till market moves above 5617
Or moves below 5505
Long positions can be carried up to 5617 with a
Stop loss at 5515.
Wait for investment buying till trend gets cleared
Stock specific
RIL
ICICI Bank
ITC
Zee
Colgate
Bharti
SPARK @93 Bartronic @ 63
Praj @74 Sharp Ind. @58
Coal India
Ecoplast @ 41 Tecporo @290
Hind Zinc@133 PFC@ 203
Power Grid @102 Sintex @ 184
KFA @41
COMMENTS
Last few trading session’s,’ Musical Chair’, in sectors and stocks
Is highly confusing. There is price movement in stocks across the
Sectors but volumes have been drying on every successive day.
Data does not suggest cash base, delivery base buying. It seems that
Market is driven by ‘Punters’ or Speculators, making it highly vulnerable
in case, there is a bad news or an event around the globe.
Global and National fundamentals are not conducive for this type of
‘Euphoria’. Investors and positional traders should trade cautiously.
As written in Monday’s blog
RBI meeting in next week
Federal meeting on Tuesday and 22nd June
Will be a ‘Make or Break’ factor for Global as well as Indian markets
Investors should stay on side lines till all the clouds get cleared
Rate hike or not
Magnitude of rate hike
RBI Governor’s stance on Inflation and Growth
Federal Governor’s remarks on QE2 (to- night)
Withdrawal of QE2
Continuation of stimulus package, QE3 or not
All theses factors will have lasting effects on global economy,
Mainly US and Indirectly Emerging Economies like India
Traders can trade with the daily trends but investors should wait
For clarity on
Progression of Monsoon
Settling down of the political dust due to 2G/3G, Ramdeo Baba
And ‘Lokpal’ draft,
Government’s policy decisions on Disinvestment, Oil and Gas,
FDI in retail, Insurance etc.(If Government gets time from present
Socio-political turmoil)
And last but not the list till Nifty moves beyond 200DMA @ 5757
IMPRESSION
UP HILL TASK
(I have been writing few things regarding ‘Fundamental’
Situation, in details and repeatedly, because, for long term
investments it is of real importance.
those who are 'day traders', can ignore it and move
With ‘Trends' suggested by technicals, still some of the events
Do affect daily market movements, so do not neglect it)
Thanks
Dr.Vasant Bele
All the views are personal, trade with caution and
After consulting experts
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