On Monday markets opened with small gap at 5340. Bulls were active all the day and had a ‘Clean and Jerk’ to lift Nifty to the high of 5463 (Well above the crucial level of 5440) The ease with which bulls could ‘Lift’ Nifty to higher levels indicate that the trend might continue for some more time. Nifty closed at 5456, nearer to the top of the day. The rise in market was broad base with a very high volume on first day of the week
What Next
For last few sessions Nifty (market) was under the pressure of lot many ‘Negatives’ like
Scams, Inflation, Interest Rates, IIP (Index of Industrial Production), Slowing of FII flows etc., all those things were reflected in Prices, Volume, Sentiment and volatility during last few days’ trades. Today’s market movement gave a ‘Breather to Bulls’.
Nifty has crossed an important level of 5440 on closing basis, now the next target for
Nifty is 5515 (NEAR TO 20DMA 5513), if Nifty close above 5515 then there is every
Chance that it will try to push for 5557 and 200DMA (5630), this will be a ‘Game Changer’ for the bulls.
In case there is reversal from 5515 immediate support is at 5420/5380 levels,
Nifty has to remain above 5330 so as to continue the ‘UPWARD MOVEMENT’
The only threats to the on going up move are
‘Political Situation’ or ‘Political Deadlock’ on JPC (Joint Parliamentary Committee) for 2G probe, if Government accepts the demand (According
to recent news Govt. has soften the stand) then ‘Bulls’ can have ‘Clean Sweep’
to 5630.
Budgetary provisions and announcements regarding infra Spending, GST,
IT tax Exemptions, Taxation on Information Tech. Sector etc.
And last
Next move by, RBI in controlling Inflation, Rate hike or Not?
For markets to change its direction Nifty should close above 5630.On its way to
the 5630 Nifty will face stiff resistance at 5515/5557. Reversal of the present up
move may test the first support at 5420/ 5380. Any breakdown below 5330 will
resume the ‘Down Trend’ with fresh velocity, till that time the trend is up with immediate target 5515.
Watch the levels
Upside: 5515/5557
Down side: 5420/5380/5330
Significance
All long positions should have stop loss at 5420 and target at 5515
All short positions should be covered at 5515 or one can add fresh shorts at
and below 5330 with a stop loss at 5380/5400
Technical View
NIFTY PIVOT IS AT: 5419
R1 (First resistance) is @ 5499
R2 (Second resistance) is @ 5542
R3 (Third resistance) is @ 5629
Significance
Bears should cover all the shorts at R1 (5499). Close above R3 (5629)
will complete the on going Downward correction and a fresh up move
will start. Bulls should book profits at R2 (5542)
S1 (First support) is @5376
S2 (Second support) is @ 5269
S3 (Third support) is @ 5253
Significance
Failure of the current ‘Pull back’ will be signaled by Nifty's close below
S1 (5376).Bulls should keep this as a strict stop loss to long positions
Bears can initiate ‘Shorts’ if S1 is broken with a stop at 5380
Break below S3 (5253) will create ‘Panic’ situation leading to new lows
In coming weeks
VXI (Volatilty Index)
Pivot is at : 22.61
Significance
Though the Pivot is nearer to the resistance level of 24, movement during yesterdays trading
Shows reduction in volatility so also is the pivotal indication for today
DMAs
5DMA@5312
20DMA@5513
50DMA@5775
200DMA@5629
20DMA@5513
50DMA@5775
200DMA@5629
Significance
20DMA will be the most crucial level for continuation of the on going‘Pull Back’
If not taken out then the down trend will resume.
Long positions created at lower levels should be booked at 5DMA (5512)
5DMA will be the level which bears should use to create fresh shorts
With a stop loss at 5513
Close at and above 200DMA (5629) will be Game changer for Bulls
COMMENTS
The Nifty opened on a positive note with a gap up opening
Suggesting that the short term momentum has reversed in the favor of
the bulls for a target of 20 DMA(5515).Failure in doing so, will take Nifty to
Immediate support, at 5380.
As long as Nifty does not take out 200DMA (5630) it will remain in ‘Down Trend’
Nifty must form ‘Higher Bottoms and Higher Tops’ for confirmation of ‘Resumption
of ‘Uptrnd’
As long as 5380 is maintained one should ride the ‘Up move’ and go on periodical
Profit booking
Fresh investment buying should resume after 5629 or below 5280, till that time it is a ‘Traders Market’
IMPRESSIONS
BREADTH AND VOLUME OF LAST TWO DAY’S MARKET
SUGGESTS THAT THE RALLY WILL CONTINUE TILL BUDGET
(UNLESS THERE IS SOME BAD NEWS)
Stock Specific
HUL
KOTAK BANK
ITC
L and T
BAJAJ AUTO
HINDALCO
STERLITE
CROMPTON GREAVS
Twilight Litaka(73)
Sanjivani Parenterals(51)
Balsore Alloys (22)
Celestial Biolab(28)
V Guard (156)
Rolta (138)
Hexaware
NIIT Tech
GMDC
Gateway Distripark(111)
Hercules Hoists
Ador Fontech
Keep proper stop loss at Nifty and Stock Specific levels
Thanks
Dr. Vasant Bele
Views expressed are personal; consult your expert before investing
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