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Bloodbath all over again! Misfortune never comes
alone, it comes in a battalion: the European
economies specifically the new bunch called
PIIGS countries have come up with fresh
problems. Concerns on sovereign debt in
Portugal, Greece and Spain have surfaced in a
big way. All these three countries would
struggle to bring down their deficits. While the
ECB chief Trichet is confident of Greece moving
in right direction, the Euro sank 1% to the US
dollar while the yen sank 2% against the USD. To
add icing on the cake the US Jobs data turned
out to be unexpectedly negative with
unemployment insurance claims rising. Warren
Buffet’s Berkshire Hathaway lost its AAA status
from the S&P.
The Dow fell by 268 points and Asia is
understandably reeling this morning with most
markets are down around 3% and that includes
Japan, Hong Kong, South Korea, Taiwan and
Australia.
Our man the SGX February Nifty is trading at
4711 down by 121 points. Today, the range
between 4717 and 4695 would be quite crucial. If
this range fails to hold, then a test of the
200-day EMA at 4653 is, most likely, going to be
there as well. Below that the 200-day Simple
Moving Average is located at 4630 even that
would be under threat if downward momentum
gathers steam.
On the upside, unless the Nifty manages to get
past 4761 – 4774 range, assuming that it would
open lower, we should not be expecting real
recovery; however, the fact that 4766 low is
getting violated today would mean bad for the
major uptrend that began on March 06, 2009 at
the Nifty level of 2539.45.
Portents are surely bad this time. The bull
market is definitely under threat!
Rajat K. Bose |
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All prices relate to the NSE, unless otherwise mentioned. |
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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. |
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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. |
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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. |
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The analyst and his clients may or may not have positions in the securities mentioned above. |
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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. |
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