Dear Investors
The ‘Flip- Flop’ trade on Friday has converted euphoria in to a cautious
optimism at the end of the trade. As it is the sudden rise in Indices had
raised ‘eyebrows’ of speculators and analysts, Friday surprised them
once again. Market after starting on a positive note scaled to the higher
Levels only to touch 200 DMA at 5740(5743). Market could not sustained
the top and profit booking made it to loose some strength, but as trading
continued it became highly’Slippary’ for traders and speculators to hold
the ground, ultimately heavy selling in large caps from, PSU banking,
Metals,Oil and Gas,RIL,ICICI Bank,L&T Coal India
and Nifty moved down to the support level of 5660 after falling to 5650.
Data for the Day
Indices
Open: 5734(19084)
High: 5740(19131)
Low: 5651(18817)
Close: 5660(18858)
Advance Decline: 1127:1757
Turnover: 1, 17,000 cr
Global Markets
All the Asian markets were in green except Taiwan
European markets were up by an average 1%
US Markets
Dow – 62(12657)
S & P – 9(1343)
Gold: 1544$/oz (22348/10gm)
Silver: 36.54$/oz (54705/kg)
Crude: 96.48$/brl (4288)
$ Index: 74.96
What Next:
‘Friday’s Fiasco’ has raised doubts about the ‘Fast and Furious’ rally
during last few trading sessions. Nifty had climbed the level just
Short of the 200 DMA @ 5743, it was a ‘Touch and Go’ trade as Nifty
could not sustained the rise only to fall back to the level of 5660.
Now the main question is, ‘Now where, from here?’ Nifty and sensex has
not closed above 5743 or 5700, which are important levels as far
as continuation of the’up move’. Now will markets ‘grind in a range?
Below 5700 for some more time or will Nifty slip back to
5600? It can not be predicted, because now a days markets are
moving in a haphazard manner, to predict the next move has become
a task so, one has to keep technical levels as a rough guide while making
further positions
Levels to watch
Upward: 5673(18888)/5716(19053)/5742(19132)
Downward: 5630(18756)/5594(18621)/5560(18540)
Technical view:
Pivot at :5699(18980)
Nifty pulled back from 5740(19131), closer to 200DMA @ 5743(19132).
Nifty has closed at a ‘very significant’ support level, 5660(18858), which
Is 61.8% retracement level of the move from 5944 (6th April 2011) and
Low of 5177(11th Feb 2011).
Next resistance is @5683(18935) which is a pivotal value and @ 5710(18983)
If Nifty manages to close above 5743, 200 DMA then it will have resistance
Above 5820 @ 5850, which is nearer to 78% retarecment value.
As we are apporoching result season and some more financial data from US,
There moight be increased volatility, in such case
Nifty will have strong support @ 5610/5550 and 5515.
As long as Nifty is above 5569(18567), 200 Day Exponential average, it will be
With an ‘Up Move’ with minor corrections in between.
Close below 5510/5480 should betaken as a sign of ‘Termination’ of the rally
Market strategy:
-Buy all the dips
-Do not go fresh short
-Book part profits at every higher level
-Avoid fresh shorts as long as Nifty is above 5515
-All longs should have stop loss for day trades @ 5599
-And for positional trade(5 to 10 days) @ 5470.
-Long term investments are to be avoided.
-Keep away from rate sensitive sectors, Real Estate, Construction
Autos
KEEP STRICT WATCH ON NIFTY LEVELS :5550 AS SUPPORT
AND 5743 AS RESISTANCE
Stock specific
ITC@202
RANBAXY@550
PNB@ 1150
HUL@ 3340
NTPC@188
BHARTI@398
HINDALCO@194
HDIL@171
Elgi Equipmwnt@82
Weizman forex@64
Rajashree sugar @49
Indusind bank@ 298
Exide@166
Ahalcon Parenterels@64
Idea @80
Punj LLoyed @76
GMDC@161
Arvind@80
Bata@631
Polaris@185
Hexaware@76
AEC@48
Mahindra Satyam@90
Wovkhatdt@398
Tata Chemical@384
United Phos.@155
Praj@76
Keep stop loss at 3 to 5% down the purchase price or at
Nifty level of 5560 for short term trade and 5550 for positional
trades
COMMENTS:
Last weeks ‘Dream Run’ was, apparently, due to heavy buying by
FII only, there was no structural change in Fundamentals as well as
Indian investor’s perception of the economy, on the contrary, it was,
(written in last blog), the Dicotomy in trades, FII buying and DII selling’,
kept retail traders and investors puzzled about market moves during last
few days, same thing has played on Friday, was it profit booking by DIIs
and day traders or short term correction before next rise?
It is difficult to answer, because…The sudden spurt in the market is not
Justifiable as………..
-There was no change in ‘Macro economic’ situation
-There was no positive news flow except some fall in food inflation
-Crude was moving in upward direction
-Result season was at next door
Globally also there were no positive developments...
-Except US markets were moving high but
-US
-China
-Portugal
-Rising $Index…. And so on………
Still FII had pumped around 2bn $ in few days in Indian market. The
Question is, will this ‘Hot Money’ stay for long or get reversed in short period.
To me, this looks like to be a ‘Technical Rally’. The rise is on the back of
extremely attractive valuation and oversold positions in, large cap and mid cap
stocks. Going forward one has to be careful before building long term
positions. One can ‘Ride the Trend’ with one eye on fundamental developments
And another on ‘Technical levels’, because this type of rallies always go by
technicals like ‘Supports and Resistances’.we can move beyond 200DMA at
5743 and above that to 5850, but the main question is of ‘Sustaining’ this
For longer pwriod.
IMPRESSION
SLIPPERY
Thanks
Dr. Vasant Bele
All the views are personal, invest with caution and after
Consulting experts
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