|
The Dow posts best two day rise in the last
three months: closed at 10297 up by 111 points.
The Nasdaq closed at 2190 and the S&P 500
finished the day at 1103 with a gain of 14
points.
Asia opened on a strong note but as of now it is
surrendering all gains. The SGX Feb Nifty is
woefully wobbly at 4947 after opening at 4958,
incidentally that is the day's high as well.
The Nifty might show a bounce back: it is very
close to a strong support, which is located at
4809. Unless the Nifty falls below 4809 and
stays there today it retains the potential to
bounce back. However, yesterday’s fall in the
market is a very damaging phenomenon for the
bulls and the uptrend that began last year on
March 06, 2009.
If the low of 4766 on last Friday gets broken
again and the bottom does not get established by
February 06 this time then the major uptrend
from March last year gets considerably weakened.
It would be worse if in this downtrend it moves
below 4635 and posting a low beneath that level.
That would be a strong signal of the bullish
strength evaporating in Indian market.
On the upside, of course, only when 4890 – 4919
range is once again cleared with full force of
volume based buying we would see some recovery.
As the Nifty manages to get past yesterday’s
high of4951, we would get a confirmation of real
strength. Else, there could be selling again
close to 4900 levels.
If, on the other hand, we see the market falling
below 4809, the next support levels are 4788 and
4763. Another strong support before it moves
into to below-4700 range is located at 4724 for
the day. One thing deserves a mention here is
that this support range between 4809 and 4724
can be broken decisively by a wide ranging day
of a large sell-off breaking these two support
levels. Else, the possibility of a bounce would
always remain.
To show any early sign of a recovery without the
confirming levels mentioned above we, at the
very least, need a close above 4878 today.
Rajat K. Bose |
| * |
All prices relate to the NSE, unless otherwise mentioned. |
| * |
Stop-loss levels are given so that there is a level below/above, which the market will tell us that the call has gone wrong. Stop-loss is an essential risk control mechanism; it should always be there. |
| * |
Book, at least, part profits when the prices reach their targets; if you continue to hold on to positions then use trailing stops to lock in your profits. |
| * |
Don't chase a stock, if you are unable to buy a stock because it hits circuit levels on successive days, don't buy that. |
| * |
The analyst and his clients may or may not have positions in the securities mentioned above. |
| * |
Trading involves considerable risk. Trade at your own risk to the extent you are comfortable. The analyst shall not be responsible for any losses incurred for acting on these
recommendations. |
|
