NDA ,UPA, Third Front ... Guess ???
Sensex Technical View :
The
view remains the same as yesterday as nothing conclusive came out
today. Volatility remains to be high with huge movements in the day.
Apart from the volatility is the quickness of the intra moves where in
100-200 points move is done away with in minutes.
The strategy to keep volumes low or avoid trading should have been helping the traders.
--
> Gap support at 11635-11430 was not broken yesterday with a low of
11621 /11625 in the last two sessions. Similarly now we have highs of
12256/12272 clearly defining the bands.
--
> Since the bottom at 8k the momentum trendline has been supporting
all dips. We have noticed around 4-5 instances where it has kissed the
line and bounced back sharply.
-- > The
bounce back has generally crossed the recent highs and made a move of
the range size. 10715-11300/500 saw a move to 12272 which is almost
600-800 points range.
--- > Current range
is around 11625-12272 which if broken points to another 600 points move
in case 12300 is taken of. This level also coincides with 12900 which
is the 38.2% fibo level. So upside could be 12900 + - 150 points.
--
> A move below 11600 and the trendline would have severe negative
implications as then we may retrace back almost 50% of the entire
upmove from 8k-12.3k.
-- > If we see the
charts closely every such move has been followed by a gap-up above the
previous highs. So in case that happens the gap levels would become the
stoploss.
-- > We have seen almost 4-5
instances of support from the momentum line any more attempts to stick
to the line may turn to be fatal and disastrous also so be extremely
cautious if indices go below the line.
In
simple terms 11600 and 12300 are support and resistance zones which if
crossed convincingly would decide the next 500-800 point move but the
technical setup also suggests it would yet again be difficult to trade
it. The trend is still up so the probabilities of 12900 seem to be
higher ( maybe market knows the result).
Option traders can look for some strategies like strangle,straddles.
Stocks to watchout for :
Many
stocks are showing false breakouts which are not holding up through the
day. This could be due to indecision among market participants or a
distribution pattern. So its very confusing technically as no fresh
signals on the index.
Time to trade only for high risk traders who are very quick.
GMR Infra and GNFC possible election impact stocks look set for some moves.
Possible breakout stocks though i am indecisive with the choppy index conditions.
Mundra Port , MTNL , Central Bank which can move up sharply
ADLABS
The
stock tried to give a breakout today but could not stay above 252-255
levels. The stock is nearing towards lower support zones of 222-225
which if broken may lead to a sharp fall. Very volatile stock so take
your own call.
Market Observations and Thoughts :
The
TV channels seem to have lots of Exit Poll scenarios and jazzy graphics
to put their view though all seem to have totally divergent
conclusions.So rather then taking a guess on Election it would be
better to watch IPL it seems!!
I am no where
close to political analyst so would avoid any interpretations about the
government formation. Technically 11600 and 12300 is what i am looking
at. Although taking a call on which side is the next 500-800 point move
is very difficult. The uptrend is intact but lot many divergences on
indicator side ( they keep giving it always ).
The
selling and buying ticks continue to be quick in the day with equally
good volumes indicates that the indecision remains high. So the next
move should be by a gap move for which the higher probability is on the
up side as the trend is still not broken.
Although
even if one is to take a call whether NDA , Congress is making the next
government there is no way to gauge the impact on market and a gamut of
stocks ( ADAG relies on SP ,PSUs like disinvestment and so on ) . SO
its like a guess where in u make or u break.
Are you taking a bet on it ???? Better find a bookie then take huge market positions :) unless u have a good risk apetitie
A small column posted in the latest edition of - Money Today magazine.
Readers can pick up a copy from any news stand or check the e-magazine
Best Regards,
Nooresh 09819225396
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