Dear Investors
Friday, during the trading hours Nifty moved beyond 5700 and sensex
Above 19000 after few weeks of laboring efforts.Nifty and Sensex
Closed at their highest level in more than 8 weeks. It was aided by good
FII flow and some retail participation. Global good news like ,Greece
Out of trouble and better than expected ‘Manufactoring Data, from US gave
Strength to markets all over the globe and India
With a Gap above 5700 and went on correcting up to 5600 to close at the
End above important level of 5600 at 5627. There was wide spread rally
In large cap and mid cap stocks indicating retail interest. It was profit booking
That brought markets below 5700 but well above 5600, which is above
200 day exponential average, a significant development.
Data for the day:
Indices
Open: 5705(19031)
High: 5705(19031)
Low: 5609(18713)
Close: 5627 (18762)
Advance Decline: 1700:1152
Turnover: 87.000 cr.
Dow: +168(12582)
S&P: +19 (1339)
Global markets closed in green
Gold: 1482$/oz (21620/10gm)
Silver: 33.70$/oz (49868)
Crude: 94.94$/brl (49868)
What Next:
Friday was the day of high and low, Nifty moved 100 points
in a day , volatility was at its high. Though Nifty has come
down from the top of 5700 it has closed above 5600 which
is above 200 day exponential average, a significant level.
All depends on how Global markets and Indian Government
Behave. Market may correct due to profit booking by short term
Traders, for short to medium term period it appears that the
Market is ‘Out of Sick Bay’ due to in time news flow from
Government and Global markets like US and Greece
All the news flow during last few days has given enough strength
To Global markets. All now depends on............
-Earning season
-US data on jobs And Manufacturing number.
Even if markets correct from this level, it should not fall below
5500 level, Now the trading range is elevated to 5480/5650,
Which is a healthy sign
Watch the levels:
UPWARD: 5651(18850)/5710(19060)/5750(19168)
DOWNWARD: 5605(18700)/5560(18553)/5480(18300)
Technical view
Pivot at: 5647(18835)
Nifty has moved beyond 200 Day exponential average on
Closing basis.
Now the next target will be 5750, 200DMA
While moving in upward direction Nifty will face strong
Resistance at 5651(18850) which is 61.8% retracement
Of the move from 5177(11th Feb 2011) to 5944(6th April 2011)
And 5710, the level where Nifty had a long pause before falling down.
Once 5750 is taken off Nifty will be making an attempt to take out
5944 which was recent high on 6th April 2011.
Any correction, which is likely, should not take Nifty below 5500 or
Precisely, below 5480. If Nifty falls below this then the on going up
Move should be taken as ‘False Break out’ and one should be prepared for
A panic fall towards 5328.
Watch the levels of 5650/5560/5480 as significant land marks .
Market strategy:
-Go long at every fall
-Keep stop loss at 5560/5515
-No shorts to be created as long as Nifty is above 5515
-Existing shorts should have a stop loss at 5650
-All longs should be booked nearer to 5750
-5690/5710 should be treated as ‘no trade zone’
Stock specific
HUL
ITC
Colgate
Hindalco
Axis Bank
DLF
R.Com
L&T
Bharat Forge
Ranbaxy
Dr. Reddy’s lab
RIL
PFC
Power Grid
HCL Tech.
ACE@48 Idea@79
Gati @63 GMDC@152
Pacific Ind@174 Talwalkar@250
Sharp Ind
Hexaware@71 Sonata@42
Tecpro@268 GVK Power@20
Suzlon@47 Arvind @80
Hercules Hoist@250 Ester Ind
Federal Bank@450 UCO bank@95
DCB @59 Yes Bank@312
V Guard @222 Voltas @160
Blue star@ 300 Pantaloon @318
Kutons@26 Shoppers stop@450
Central Bank@124
COMMENTS:
Bulls were waiting for a good news to move out of the
‘Sick bay’ and they got it from Indian Government and from
Austerity package. Bulls then dashed to take markets out of the
Sinking illness and suddenly flurry of news flow has started
Coming to help them to move with strength, like the news flow
-Fall in food inflation
-FM indicating the growth rate at 8.5
-Growth in exports by 56%
-Cairn-vedanta deal going through
-Falling crude and commodity prices
-FIIs were net buyers in last week
And to this was added by the news flow on Sunday 3rd July
-Decision on FDI,by Government, in ‘Multi Brand’ retail likely in
JULY
-Banks transmit RBI policy action, hike lending rates
-Euro zone agrees to release 12 bn payments to Greece
-Current headwinds to global growth story is temporary, Fitch
Rating agency
All in all it looks that ‘Bears’ are getting out of the game.
It will be premature to think that markets are out of woods and
Will move towards new high because there are certain hurdles
to overcome in coming days, like……
-Slowing of growth and margin compression for industries
-Rising Inflation
-Rising Bank rates
-Deficient Monsoon in some parts of India
-Apathy in government spending for Infrastructure
-Retail non participation in markets
One thing is certain that environment is changing for markets
to move forward, but it has to be seen how far and how
Much convincing the change is.
Technically markets have moved beyond the ‘Grinding Range
In an upward direction, hope the news flow will take it in to
‘New orbit’.
Next few days will be critical for ‘Bulls’ so keep watch on
-Earning season
-Crude oil prices
-$ Index
-S&P Index
-Rupee movement and
-Monsoon
All this will decide whether we are……….
-Out of woods or the rally is a relief rally
-Is it a ‘Change of Gear or change in sentiment only?
-Is this a ‘Break through or up ward correction in down trend
-Is it a ‘Turnaround’ or we are ‘Around the turn?’
-Should one be ‘Optimistic’ or ‘Cautious?’
IMPRESSION
GAINING STRENGTH
Read Weekly analysis as a separate blog
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution and after
Consulting experts.
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