Wednesday
Dear investors,
Indian markets opened a grand ‘Monsoon Sale
the news of, weak global markets, bad IIP numbers and below
expectation results from Infosys. News flow from, US and Europe
pushed Indian markets to the vital support level of 5500.There was
Monsoon sell (sale) across the Large, Mid and Small cap sectors
with heavy fall in valuations. Volume was very high and breadth
was negative.
The sensex fell 309 points, to close at 18,411 and the 50-share
Nifty tumbled 89 points or 1.6%, to settle at 5,526.5,
Realty, Auto, Capital Goods, Metal and Bankex fell 1-2%. L&T
HDFC, SBI, HDFC Bank, Tata Motors, DLF and Tata Steel were
down 2-4%.
NTPC, Bharti Airtel and BHEL lost 1%
However, ONGC, HUL, Axis Bank, Power Grid and Dr Reddy's Labs
were only gainers.
Data for the day:
Indices
Open: 5556(18698)
High: 5580(18589)
Low: 5496(18326)
Close: 5526(18411)
Advance: Decline: 975:1871
Turnover: 1, 60,000 cr
Asian markets were down by 2 to 3%
While European markets down by 1%
Gold: 1562$/oz (22695/10gm)
Silver: 35.63$/oz (53925/kg)
Crude: 97.43$/brl (4318)
$Index: 75.14
What Next
Wait and watch, one has to be cautious in building fresh positions
on either side. Market has fallen for three consecutive days., as long as
global problem is in, and result season is on, it will be prudent to
wait for some more time, before making fresh allocations
Hold your horses till the track is clear; be on side lines and watch
the game
Technical levels will give some idea regarding market direction.
One thing is certain ‘The dream run’ is over for the time being. So
Be practical before making next moves.
Levels to watch:
Upward: 5570(18564)/5611(18698)/5650(18800)
Downward: 5501(16332)/5480(18290)/5440(18160)
Technical View:
-Nifty is thrown away from 200 DMA(5743) to sub 200EMA(5570)
Level within three sessions.
-Now we are back to square one, range bound, 5400-5600
-Next support (In falling markets supports are more important than
Resistances) is @ 5501/18332 which is 40DMA and 5480/18290.
-Once Nifty breaks below 5480/5440 range, then the next support
will be way below @ 5330/5310 levels from where Nifty had started
the so called ‘False up move’
-In case there is a bounce then the immediate resistance is @5570(18564)
which is 200 Day Exponential average.
-As long as Nifty remains below 5570/5580(18564/18590), it will be
In a ‘Down trend’ for short term.
Keep watch on: 5570 and 5480 as trend deciders in near term.
Market strategy:
-Do not trade for first half an hour
-All long positions should have 5480 as a stop loss
-Do not initiate fresh long positions as long as Nifty is below
5570(18564)
-Fresh shorts can be initiated at every bounce with a stop loss
@ 5611(18698)
-All existing shorts should have target @ 5440 and stop loss @ 5611
Stock specific
Infosys
ITC
HUL
Ranbaxy
Lupin
Dr. Reddy
Our calls on Weizman Forex,Tainwala Chemical,Gati,Wochardt,
Sharp Ind.,Charterd Capitol have yielded good profits in bad market.
Weizman Forex@81 Praj@74
Gati@71 ACE@46
Sharp Ind.@70 Punj Lloyed @74
Pacific Ind@170 V-Guard @220
Arvind@81 Talwalkar @237
Essar port @100 NIIT Tech @182
Federal Mugal@271 BOSCH@7000
Fortis @165Petronet@140 HDIL@158
COMMENTS:
In my last blog, ‘Aberration or Abortion’, it was written, that, the on
going rally was without and fundamental base and on the back drop
of, number of ‘Negative Factors’ around the world. Still the ‘Hot money’
chased the markets in such a way, that everybody started thinking it
to be a fresh ‘break out’. It was insistently mentioned, that the rise in
market is due to the inflow of ‘Hot Money’ by FII, which never stay for
longer period, it was mentioned that we are at the mercy of ‘Flirters’.
It was not the ‘serious money’. This type flows always wait for the
opportunities to ‘Dump’ traders and investors. Today they got the
Best opportunity in…….
-European Ghost
World can not take the European Debt Ghost, off its neck.
debt crisis in the Europe continent has been catastrophic for
world markets.
The bailout for Greece
by, Portugal , Italy and Spain
"Italy and Spain
are far bigger in magnitude than Greece , Ireland and Portugal
This could create some more turmoil in world economic market.
-IIP(Index of Industrial Production) Numbers
Lower than expected IIP(Index of Industrial Number) at 5.6
has confirmed the slowing down un Indian Manufacturing
sector, capital good industries and mining sector. Analysts
and economists feel that this is just the beginning of slowing,
still the effect of raised interest rates, increased wages and cost of
raw material is not fully reflecting in numbers. It will take
some more time to get a clear picture.
-Infosys Results
Not to the expectations of analysts and industry commentators.
It was guidance for next quarter which is indicative of future
growth in sector which has created shivers in it sector. European
slow down and US problems may affect IT industry in future, which
was a ‘hidings place’ for market participants?
So, it seems 5740 was an ‘Aberration’ and fall after that to
5651 was ‘Abortion’ of the rally; hope it is not ‘Incomplete’
Moral of the story is ‘Never chase a stranger’ or one should
‘Flirt, Fly and Forget’ the hot money. Experience always says,
‘Do not forget the basics’; the basic in stock market is in
‘Fundamental’ strength’
One can afford to ‘Ride the trend’ for short term gains but for
Longer term profit one should ‘go with the fundamentals’
IMPRESSION
CONFUSED
(Traders, Investors and Analysts)
Thanks
Dr. Vasant Bele
All the views are personal; invest with caution and after consulting
experts
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