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Market Outlook -
May 17,
2010 |
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Does it promise to be an encore of 2004, where
the same Friday – Monday combination for the
dates of May 14 and May 17 had been there,
remains to be seen? If it does so then it would
be painful yet quite a good thing for the day we
saw the market bouncing back and closing much
higher from the depths of despair.
However, that time our politicians, especially
from the Left who had blissfully ignorant of the
market developments and thundered on
audio-visual media for the need for an enquiry
into market manipulation as that was the day
when the then parliamentary election results
unseated the incumbent NDA and the UPA emerged
the winner. The world over equity markets
recovered after recording intermediate lows
during the session and so did our market. The
driver was the FII buying in all markets not so
much election result being favored or disliked
by the investors. It was our first raw
cognizance of global synchronic market movements
that began a year back on April 28, 2003.
Now, the moot point is can we expect a similar
development today? Sadly, not quite! It could
happen only if there is another round of big
time panic else this time it looks well set to
test the 200-day Moving Averages: the simple one
is at 4981 while the exponential one is at 4894.
Before the simple one is tested the level of
5054 might act as some support but once the
Nifty breaches 5020 it is almost certain that
the simple one at 4981 would get tested.
Even if there were to be a panic, the Nifty is
likely to stabilize between 4951 and 4877-this
range has got lot of supports apart from the
moving averages. If 4877 gets broken firmly then
a likely test of 4700 could well happen going
forward.
One thing is getting certain: if there is any
recovery the level of 5120 would act as a strong
resistance for the Nifty. Only when the Nifty
crosses and sustains above the 5200-watermark,
we would get to know that the bears have beaten
a retreat. Till such time that happens the bears
would most likely use higher prices to sell.
Rajat K. Bose |
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| Notes: |
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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
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Rajat K Bose
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