Vertical Moves(sustainable?)

Dear Investors

On Wednesday Indian Cricket team and Indian Stock markets

Continued their ‘Winning spree’ Markets

Continued to rise for 7th day in a row. There seems to

Be no stopping in buying, by traders, FIIs and Investors.

Till Tuesday only large caps were moving but now 

   mid caps and Small caps too joined the party.

The rally was broad base with good advancing stocks and

Very few declining. It was FII/DII and retailers too went on

Pouring money in stocks which were beaten in last few weeks

There was a sector rotation from IT to Banking to Cap Goods

To Infra and today Cement helped in ‘Cementing the gains’
of last seven trading sessions

Nifty opened with a small gain at 5755 and went on to cross

5800 level to close nearer at 5787

Levels of the Day:

Nifty: Open: 5755, High: 5803, Low: 5753, Close: 5787

Sx. Open: 19178, High: 19357, Low; 19178, Close: 19290

VXI(Volatility Index) Op:21.22,Hi:22.14,Low;19.95,Cl:22.04

What Next

Heavy FII buying, High volumes (due to expiry) and good

Advance- decline ratio (5:1) indicate that this rally will

Continue in near term.

It looks that we are heading for a ‘climax of the rally’ before

An expected correction

It has been a ‘Vertical Rise’ since we tested the low

At 5177, a gain of 650 points, in last seven days. One must

Remember that such ‘Steep’ rise may not be sustainable

And will correct some time , only thing is you can not time

The change.

All falls can be used to buy while up moves can be partially

Booked for some profits

Traders and investors should exercise caution as we
 reach the important level, 5880

Today we may see extreme volatile trades.

It will be a real test of the market as we go for result season

In April.

Levels to Watch

UPWARD: 5809/5820/5860(19372, 19403, 19555)

DOWNWARD: 5749/5693/5629(19178, 18770, 18635)

Technical View

Pivot for Nifty: 5781(19275)

R1 (First resistance) is @ 5809(19372)

R2 (Second resistance) is @ 5831(19454)

R3(Third resistance) is @ 5859(19551)

Significance

When market participants start expecting

A correction, resistance levels will be more important

Than support levels, careful watch of R1/R2/R3 and

Pivot, will help traders and investors to avoid excess long

Positions and proper profit booking.

 Traders can use Pivot as re entry point and can   use

 R2 and R3 as Important profit booking levels in short term

S1 (First support) is @ 5759(19193)

S2 (Second support) is @ 5731(19096)

S3 (Third support) is @ 5709(19014)

Significance

All long traders can watch support levels to place

Stop loss for carry forward trades.

Once the correction sets in support levels will help

To revert the trades.

S3(5709) will be a significant level to exit from long

 trades and wait on side lines till there are definite

signs of getting back to Pivotal level (5781)

VXI(Volatility Index)

Pivot : 21.34

R1:22.80/R2:23.58/R3:24.99

S1:20/S2:19,/S3:18 (rounded)

As expected there will be rise in volatility on

The day of expiry, so keep strict stop losses

And avoid large positions to the end if the

Trading session, the level of VXI at the end of

The trading sessions and tomorrow will be

Most significant as far as next trend is concerned

DMAs(Day moving average)

5 DMA @5616 (18687)

10 DMA @ 5519(18365)

50DMA @ 5495(18331)

100DMA @ 5749(19137)

200DMA@ 5693(18967)

100Day Exp Ave.@ 5629(18765)

200Day Exp. Ave.@5589 (18635)

Significance

Indices are above all the moving averages, indicative

Of a strong up move in near term

Watch for 100DMA (5749) and 100 Day Exp (5629)

Any fall below these levels will indicate a change in

Trend of the market

Close below 200DMA (5693) and 100Day Exp (5629)

Will be significant, will indicate a steep correction in

 Coming days

COMMENTS

The on going strong rally is based on certain factors

Attractive valuations

Strong global markets

FII buying and increased liquidity

Cooling of crude

Stable geopolitical conditions in Middle East

Some policy action by Indian Government

Clearing of Cairn Vedanta

All these things have taken out fear from the minds of

FII and Indian Institutions leading to a strong buying

In different sectors.

Next progress of the stock market should be seen in

The light of events to come

Expiry rolls over for April series

Result season

Disinvestment program of Indian Government

Results of 5 State elections

Inflation

RBI stands on interest rates and Growth

Global conditions

Global Stock market correction

Crude oil prices

And Rise of any new scam

The balancing of all these factors will decide the fate

Of Indian Stock markets in coming days.

The strong of ongoing rally has not allowed retail

Investors to participate in the market

.

As usual retails get in at the top of the band and

Stuck their till correction sets in.

Long term investors can use all the falls (only and not rise)

To enter the markets and try to book profits at appropriate

 Levels

Stock specific

As today is Expiry day I am avoiding to give

Stock specific buy calls,

Keep strict stop loss for all your positions

Either short or long

It is advised not to go short till a trend emerges

IMPRESSION

AMEZED

Thanks

Dr. Vasant Bele

All the views are personal, invest after consulting experts

ON TOP but AT the EDGE

Dear Investors

Sixth session of relentless rally in stock market has kept

Investors, traders and analysts puzzled, Market has been in

A ‘bottom up’ position, 5200 has gone, 5300, 5400, 5500 5600

Too have gone we are at 5700 and still no signs of ‘fatigue’.

Markets  have gone past caution, exuberance and euphoria,

It’s in a stunning speed and swing. Nifty opened flat and lost

Few points in the opening trade, but the ‘charged bulls’ never

 Let it go down during the day. Nifty wiped out 5700 with an

Ease to go ahead and test important resistance of 5760.

FII buying and short covering helped Nifty to reach the top

Of 5770.In closing hours, profit booking brought it down to

5736. Still well above 5700.

Today’s levels

Nifty: Open: 5686, High: 5680 Close: 5736

Sensex: Open: 18949, High: 19226, Low: 18944, Close: 19120

Volatility index: Open: 21.2, High: 22.19, Low: 20.37, Close: 21.2

What Next

Traders and speculators should keep strict stop loss for all the

Trades at the nearest resistance and support levels

As we are approaching expiry, there will be lot of volatility

During the day trades

.It is better to avoid long term investments till we get a

 Substantial correction while we are heading for the 'TOP'

One must keep in mind that it may be at an 'EDGE' of a fall

Nifty may correct 100 to 150 points to take support at

5595/5565 levels

The upside is at the most up to 5790/5818,

It is advisable to avoid  to buying at higher levels , say

Beyond 5790, all trades should be with stops.

Watch the levels of

UPWARD: 5790/5801/5818

DOWNWARD: 5720/5688/5630

Technical View

Pivot For Nifty: 5728

R1 (First resistance) @ 5777(19249)

R2 (Second resistance) @ 5818(19378)

R3 (Third resistance) @ 5867(19531)

Significance

R1 (5777) is  the top on Tuesday (5770), indicating

That there is lot of selling pressure in the zone of

5780/5801

Close above R2(5818) will take Nifty to a new territory

Of 5790/5880/5900

All long trades should be partially booked at 5800

and carried with a stop at 5691(200DMA)

No shorts till we are below R1(5777)

S1(First Support) @5687(18967)

S2(Second support) @ 5638(18814)

S3(Third support) @ 5597(18658)

Significance

S1 (5687) is placed nearer to the 200DMA @ 5691,

Signifying its importance, any close below this will

Be a first indication of setting in a correction, so

All the long trades should have a stop at and below

It at S2 (5638).

Any fall below S3 (5597) will indicate, termination of the

Rally, because it is placed nearer to the 200Day Exp.

Average at 5587

So traders and speculators should watch these levels

Than going with resistance levels

VXI (Volatility Index)

Pivot @21.25

R1:22.13/R2:23.07/R3:23.95

S1:20/S2:19/S3:18(Rounded)

Significance

Movements of VXI indicate that we are in a

Rising volatility period, VXI beyond 22/23

Is not good for an up trend, traders should be carefull

During the day and guard all the positions with stop

Loss. Fresh buying is not recommended.

DMAs(Day Moving Average)

5DMA@ 5551(18460)

20DMA @ 5491(18309)

40DMA @ 5450(18181)

50DMA @ 5493(18326)

200DMA @ 5691(18958)

50 Day Exponential @ 5553(18523)

200 Day Exponential @5587(18632)

Significance

Market is above all the short/long term moving averages,

Indicative of a bullish ness in the market.

As we proceed towards new levels one has to keep

Watch at 200Day simple and Exponential averages

For reversal of the trend. As long as the indices are

Above those, one can keep long positions on, with a

Stop loss at 200Day simple average @ 5691 as a

First signal of change in the short term trend

No fresh long term buying is advisable at higher

Levels.

COMMENTS

Wait and watch is the mantra, Trading in such a situation is

Risky, it has become a game of 20:20, no body knows the

Winner on that day. Those with weak heart should not trade

We are approaching a zone of ‘High Risk’.’ Low reward’

Nifty is entering in an area of multiple resistances.

One has to take in to consideration few points

Nifty has moved around 600 points from low and Sensex 1300

Points from the low, all this rise was without any correction.

The rally is not broad base, Mid cap stocks have not moved

During this rally

This rally is at an year end and expiry period

Volumes in F&O were high s compared to cash indicating

That there was hardly any delivery base buying

FIIs were net buyers but DII buying was not significant

Retail participation have feeling of ‘Left out’ of the rally

,It was  with an unnatural speed

This rally was on the backdrop of number of ‘Nigetive

Events ‘ and ‘News’ in and around us

All this creates doubts about sustainability of this rally.

Still one has to go by the trend, no contrarian actions

Please.

Exersise caution at higher levels and try to book part

Profits at every rise.

IMPRESSION

VERTIGO

Stock Specific

Long trades with strict stop loss are advised in

RIL

ICICI Bank

M&M

L&T

Bharti

Rel. Com

SAIL

Sterlite

Canara Bank

BOB

LIC Housing Finance

EMCO

Geodesic

Delta corp

Sintex Ind.

India Glycol

Polaris

Mphasis

Hexaware

UCO Bank

Andhra Bank

BILT

KSK Energy

ELGI Equipment

Investors are advised to wait for long term

Buying.

Thanks

Dr. Vasant Bele

All the views are personal, invest after consulting experts

CAUTION , EXUBERANCE and EUPHORIA(Choice is yours)

Dear Investors

After two months ups and downs on Monday markets

Reached the psychological level of 5700 , It was fifth

Consecutive day of up move in Indian stock market.

Nifty after touching 5709 closed at 5687, sensex too

Had crossed the 19000 mark to close at 18943

Monday’s Levels

Nifty: Open: 5654, High: 5709, Low: 5643, Close: 5687

Sensex: Open: 18799, High: 19024, Low: 18799, Close; 18943

VXI (Volatility Index) Open:20.4/High:21.8/Low:20.2/Close:21.0

What Next

 Indices have tested the important upper levels during the trade

To close at 200DMAs(Nifty:5688/Sx.18941) . This is a crucial

Period for markets. Last five trading sessions, especially last

Two sessions, have been too fast to ‘Digest’ it, hard to say that

We will move forward with the same ‘Zing’ without ‘Digesting’

The gains of Friday. Market may consolidate at lower levels of

5588(200 Day exponential Average) 5688(200 Day Simple

Moving average). Range or even at lower levels. The rise

In indices during last few sessions is, truly, not on sound

Fundamentals and looks like to be a 20-20 type of situation.

Now is the real Indo-Pak battle (Bulls and Bear).

One has to be very careful in creating fresh positions before

Markets test some lower support levels.

There are number of sensitive areas beyond 200DMA and they

May create selling pressure, Keep watch on 5699/5720/5760

And 5798 levels, these may prove to be supply zones for

Nifty .All positions after 200DMA should be with strict stop loss

Though there are chances that markets, after moving out of a

‘Solid consolidation, will try to scale higher levels of 5819/5880

It will face number of hurdles during the process.

Keep watch on

UPWARD: 5699/5720/5760

DOWNWARD: 5620/5588/5515

Technical View

Pivot For Nifty: 5679

R1 (First resistance) is @5716(19045)

R2 (Second resistance) is @ 5745(19147)

R3 (Third resistance) is @ 5782 (19270)

Significance

All the resistance levels are within the range of

5700/5800, indicating confluences of resistances

At every small rise, this indicates that it will be

Difficult for markets to go beyond 5790 levels in near

 Future.

Long traders are advised not to create fresh long at

Higher levels till Nifty takes out 5790 on closing basis

S1 (First support) is @5650(18820)

S2 (Second support) is @ 5613(18697)

S3 (Third support) is @ 5584(18595)

Significance

S3 (5584) Is placed nearer to the 200 Day exp. Average

Which should be a strong support for the going up move

Break below it will signify a change in undertone from

Up to down.

VXI (Volatility Index)

Pivot @ 21.04

Significance

As long as volatility Index remains in a range of 18-22

Nifty will be moving in an up trend any increased volatility

Beyond 22, towards 24-28 range should be looked up on

As change in trend

DMAs(Day Moving Average)

5DMA @5487(18239)

20DMA @ 5471(18238)

40DMA@ 5445(18167)

50DMA @ 5495(18331)

200DMA @5688(18950)

50 Day Exp. Ave. @ 5548(18498)

200 Day Exp. Ave. @5587(18630)

Significance

We are at the level of 200DMA, where there is likely to be

Lot of supply leading to fall in Nifty levels, Close beyond 200

DMA WITH VOLUMES FOR NEXT FEW SESSIONS, will be

Needed to confirm the continuation of ongoing up trend

And or beginning of a ‘Bull Market’.

All higher levels should be used to book part profits and

Dips to the levels of 5588 can be used to buy.

Any close below 5588/5515/5480 should act as a

Warning bell for long traders.

COMMENTS

The present rally was an effect of a long consolidation

 In a tight range, traders should look all the dips as an

Opportunity to buy, with a target of 5790, beyond which one

Should be watching the speed of the rally, It may not 

Sustainable for longer period and markets may drift back

To the support at 5588 level, if lower levels are achieved

In the course of a fall, traders should wind all the longs and

Wait for the sure trend to emerge.

The rise in markets during last few sessions looks

Like to be a technical one, than fundamental, because there

Is no change in fundamentals of India during last few days, so it

Should be taken with caution, no Euphoria and no Exuberant’

Positioning.

Stock Specifics

ICICI Bank

RIN

HUL

BOB

Canara Bank

L&T

Bahrti

Elgi Equipment

EMCO

Elecon Eng.

LIC Housing

GIC Housing Finance

Celestial Lab

Ador Fontech

Artson Eng

Orchd Chem.

Idea Cellula

IDBI Bank

UCO Bnak

Federal Bank

Lanco Infra

Depending on Nifty levels keep stop loss

IMPRESSIONS

FACING A  WALL , DIFFICULT TO BREAK

Thanks

Dr. Vasant Bele

All the views are personal, invest after consulting expert

WEEK-END BONANZA

NEXT WEEK  

                                    

Dear Investors

Indian stock markets rallied on Friday to intercept

 6 to 8 weeks ranged trading .It was a ‘Buffet Bonanza’

.Both Nifty and Sensex ended the week above 200Day

 Exponential  moving average

Nifty gained 132 points to end above an important resistance

Level of 5600 at 5654 and sensex after gaining 465 points

Ended above 18800 at 18815

There was across the sector buying , specifically IT, Banking

And Cap good sector saw great amount of short covering

And long built up.

Volumes were good and FII bought 1446 corer Rs worth stocks

On Friday.

Levels on Friday:

Nifty: Open: 5588/High: 5667/ Low: 5560

Sensex: Open: 18480/ HGH: 18858/Low: 18480/Close: 18815

What Next

Though market on Friday has broken out of a range and gone

Beyond resistance levels of 5600 and 18000 with good volume

Traders and investors should not be either Euphoric (Long Traders)

Or Get in to Panic (Short traders). There were certain positive

Developments during the week which boosted the sentiment.

Though according to analysts all bad news is in the valuations, one

Should take this ‘Sudden Spurt’ with caution because

There is no fundamental change in last few days so as to

Make markets bullish

It was some news and comments which created a sense of

Bullishness  leading to a frenzy in stock markets….

Comments by finance ministry sources regarding less

 Borrowing Target by Government

Banks ending March with less mark to market losses

 leading to short Covering and fresh buying in banks stocks

Declaration of good results by Accentura, a leading US IT

 co. changed the Sentiment in Indian IT sector

leading to rally in Infosys, HCL,TCS and others

As Nifty and Sensex crossed certain resistance levels there was a

Panic in short   traders to cover their positions which  added

 additional fuel In market leading to cross the

50 and 200 day Exponential Average.

There were fresh long created by FII in certain sectors like Banking

And Cap goods which lifted the sentiment of markets

Indian currency not falling, indicating that FII have not withdrawn

From Indian Markets

There are certain worrying factors which market participants

Should not ignore during next week, like…..

Debt distress in Europe

Downgrade of Portugal

Spiraling Oil Prices

Rising Inflation

Slow Disinvestment process

And

Expiry on 31^st March

And

Earning season will be on in next month

During next few days one has to see how a mix of all these factors

Work in the minds of traders and investors .

Market had teste March low at 5340 on 21^st , from there

Nifty rallied during next 5/6 trading sessions to cross the

Important resistance leve of 5600 and went on to close the

Week at 5667 , a gain of 371 points in Nifty in 5 trading sessions

Nifty and sensex has crossed all the short term simple moving

Averages like 5/20/40 and 50 indicative of a short term up trend

Even 50/200 Day Exponential averages are taken out by Nifty

And Sensex ,

Now the next resistance comes at 200 Day Simple Moving Avrage

Placed at 5685/18941

This will provide stiff resistance to market leading to selling

By traders and investors , any correction will take Nifty to

200Day Exponential average at 5588 or below that at 50 Day

Exp. Average at 5542.

As long as Nifty remains above these levels all the dips should

Be bought with a target of 5700/5760 in mind.

It is advisable not to  built shorts, unless Nifty breaks below

 5542/5480 on closing basis

 Next Week watch the levels

UPWARD: 5688/5700/5760

DOWNWARD: 5588/5542/5480

COMMENTS

Events like Derivatives expiry and sales number of Auto

 And Cement firms will determine market direction for next

 Week. Developments in the world's third largest economy

 - Japan and Portugal’s debt crisis, may continue to remain

 a concern. Crude oil prices will also remain in focus owing

 To unrest in the Middle East and North Africa

Also keep track of PCR (Put call ratio) and VXI (volatility),

There are certain significant technical developments like…

Reduction in Put call Ratio (PCR), indicating long built and short

Covering.

VXI (Volatility index) has dropped below 20 and getting

Settled at lower levels, One has to remember that VXI

And Nifty go in opposite directions. If VXI is down Nifty

Rises and vise versa. As VXI starts settling market gets

Bottomed out

As the expiry is nearing there will be rise in Volatility, short traders

Will not be rolling their positions leading to less shorts in the

System in April series, so market direction will be decided by

Fresh long in F and O as well as cash base buying by FII/DII.

In April Indian industrials will start earning season.

Earnings are likely to be affected by oil prices and commodity

Prices.  

So even though markets are surging ahead with great speed

And expectations, there are important ‘Road Blocks’ ahead

Traders and investors should play market with caution, safety and

Without euphoria. Have trades with stop loss and or

Buy with small lots at every dip.

SECTOR SPECIFIC

Traders and Investors can think of buying in

Banking

Cement

Capitol Goods

Construction and Infra

Mid Cap IT

Avoid

Autos

Pharma

Fmcg

Reality

IMPRESSIONS

Bullish Bias with caution at higher levels

Thanks

Dr. Vasant Bele

All the views are personal, invest after consulting experts.

Read Market for Monday’ as a separate article