Tuesday, February 1, 2011
Today Advise
The markets seem very irrational in the short term, but are very rational in the long term. It is this paradox that confuses most traders. – Rashesh Shah
Nifty Detail View on 2 2 2011
Nifty Watch: - Today Nifty open with gap up at 5542, and then faced a big decline almost after open. We saw an one sided trend, with the Nifty finally closing almost a 100 points lower at 5423 point, giving a decline of 119 points from its open. Today’s close (and low) is the lowest point of nifty since 31 August 2010.Today’s market ends the rally which started from Sep 2010. Thus, in a period of six months, the markets have come full circle, first going up, and, now giving up all the gains.
Trend:- The Market is in an intermediate downtrend. We have the pattern of lower highs - lower lows and also market is trading below its 200 days and 50 days moving average.
The Nifty has not yet touched the level of minus 45 on TA Insync (55-5) which means market is still not oversold.
Level:- Looking for support first at 5380 and then at 5220. The resistance comes at 5470 and then 5540.
Summary:- Today’s market made a new low since August 2010. A large consolidation during June – August had a low of 5350. If the Nifty were to break below this low, we would be in a bear market. We feel that lower levels are coming. The world is de-rating the Indian markets. Even today, the Nifty sells at a PE of 21 while most emerging markets sell at much lower PE ratio. We have to accept the fact that the India Story while remaining intact is no longer a glamour story. Investors can wait for lower levels and base building while traders should go with the intermediate trend which is down. Traders should also be ready for a sudden, sharp relief rally that can come about any time.
Trend:- The Market is in an intermediate downtrend. We have the pattern of lower highs - lower lows and also market is trading below its 200 days and 50 days moving average.
The Nifty has not yet touched the level of minus 45 on TA Insync (55-5) which means market is still not oversold.
Level:- Looking for support first at 5380 and then at 5220. The resistance comes at 5470 and then 5540.
Summary:- Today’s market made a new low since August 2010. A large consolidation during June – August had a low of 5350. If the Nifty were to break below this low, we would be in a bear market. We feel that lower levels are coming. The world is de-rating the Indian markets. Even today, the Nifty sells at a PE of 21 while most emerging markets sell at much lower PE ratio. We have to accept the fact that the India Story while remaining intact is no longer a glamour story. Investors can wait for lower levels and base building while traders should go with the intermediate trend which is down. Traders should also be ready for a sudden, sharp relief rally that can come about any time.
Market Outlook for 2 2 2011
Market opened on a flat note but saw huge selling immediately especially in stocks like Tata Motors whose monthly sales figures disappointed the markets in a big way. Yesterday’s gainers like Bank of Baroda, Canara Bank and SBI gave up all its gains.
Weakness and heavy selling by FIIs in Tata Motors and Reliance broke the strong Nifty Support of 5425 and the market finally closed on a very weak note. The factors which are affecting the market in a big way are the macro concerns like interest rates, inflation figures and serious governance deficit which has weakened the sentiments in a very big way. ADAG stocks witnessed fresh bouts of selling as Reliance Infra closed below Rs.700 and Reliance Capital made an intraday breach of Rs.500. Titan made some brave attempts to rally but that too faced a lot of resistance around 3650 levels. The only stocks which showed some decent buying were HDFC and HDFC Bank.
There is very little one can do at this stage and hence it would be prudent to stay on sidelines. Bottom picking the market would be like catching a falling knife. Hence, we are of the view that one should not invest fresh money in the market till the time markets make a higher bottom atleast on the hourly charts. Nifty will now face strong resistance at 5450 and 5485 levels. It might find some support around 5350 levels and if this level is broken, the next important support lies only at 5295-5310 levels.
Weakness and heavy selling by FIIs in Tata Motors and Reliance broke the strong Nifty Support of 5425 and the market finally closed on a very weak note. The factors which are affecting the market in a big way are the macro concerns like interest rates, inflation figures and serious governance deficit which has weakened the sentiments in a very big way. ADAG stocks witnessed fresh bouts of selling as Reliance Infra closed below Rs.700 and Reliance Capital made an intraday breach of Rs.500. Titan made some brave attempts to rally but that too faced a lot of resistance around 3650 levels. The only stocks which showed some decent buying were HDFC and HDFC Bank.
There is very little one can do at this stage and hence it would be prudent to stay on sidelines. Bottom picking the market would be like catching a falling knife. Hence, we are of the view that one should not invest fresh money in the market till the time markets make a higher bottom atleast on the hourly charts. Nifty will now face strong resistance at 5450 and 5485 levels. It might find some support around 5350 levels and if this level is broken, the next important support lies only at 5295-5310 levels.
Nifty Look on 2 2 2011
- Nifty continued the downtrend and lost all the previous day’s gains thus engulfing the previous candle.
- 5340 is the immediate support for the market while 5480 is the immediate resistance for the nifty.
- Today market is expected to trade in the range of 5300– 5580.
- Hold nifty with stop loss 5520 on closing basis..
Subscribe to:
Comments (Atom)