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Asia shrugs off the late session sell off in the
US market: the Dow barely managed to close in
the positive territory, closing two points
higher than its previous close. The Nasdaq and
the S&P 500 posted better performance by
notching gains of seven and three points
respectively. However, as mentioned at the
outset, Asia does not seem get bothered much by
all this: it is up on an average by about 0.50%
and as we write this Market Outlook only China
is in the red.
The SGX March Nifty is trading 5032 down by only
two points on very thin trading. This kind of
thin trading and an almost flat movement show
that it is, as of now, incapable of giving any
clear signal as to how things would turn out by
the time our market opens.
There are certain encouraging signs in
yesterday’s trading primarily the Nifty PCR
moved up to 1.24 from 1.19 the previous day. The
NSE VIX falls further to 21.63 in yesterday’s
trading giving strong trending signals. Nifty
March and April futures have added good amount
of open interest put together nearly 390,000
shares. The Stock futures have added nearly 20
million shares out of which 2.2 million for only
Shree Renuka. Total turnover recorded has been
Rs 900 million.
What has tilted the scales in favor of the bulls
is good amount of buying in the last two trading
sessions by the FIIs. The only thing that we
find as a matter of some concern is that the
Mini Nifty contracts have also added 20 million
shares—this is clearly an indication of small
retail players joining the bullish bandwagon.
Well, nothing much to worry right at the
beginning. However, if it does keep on
increasing we all should be on our guard.
The levels that we need to keep in mind in
today’s trading would be 5054 and 5029. Below
5029, the crucial level is at 5001 where the
89-day Simple Moving Average is located. Unless
this gets broken there is not much to worry for
the bulls. One thing, however, needs to be
noted—the Nifty has advanced quite a bit from
its 5-day at 4906. If the Nifty gets too
stretched out from this MA there would be a
throwback swing towards following the adage,
“prices regress to their mean.”
On the upside, above 5054, the levels to keep in
mind would be 5063, 5086 and then 5137. Any
major upswing would, however, be severely tested
between 5150 and 5180 as it has been a strong
supply zone any journey up.
As of now, the sulking bears would not have much
to rejoice unless they are able to push the
Nifty down below the support zone between 4914
and 4906. Prior to that 4952 and 4931 are two
key support levels.
There are enough skeptics in the market about
this upswing, it is a healthy sign for the
nascent uptrend. Expect it to continue, at
least, for some more time.
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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