You must
read previous articles and watch the given chart carefully to understand this
article completely.
Today’s
outlook: -
On 24
January 2013, FII bought INR 586.87 crs and DII sold INR 331.92 crs.
It was
stronger push by banking stocks which has pulled the market higher on Friday. We
have saved 20 EMA again in the dip. We have RBI monetary policy review tomorrow
and we have derivative expiry for January month series this week. So this week
is going to be vital and critical for market.
Market is trying
to be stable above 6000 but we have seen under performance in mid cap and small
cap index in last few days. It is looking like to deny ‘negative divergence of MACD’
for few more days. I am giving all importance to 20 EMA support. We can say
that market is saving till now and may try to extent little more in this week
of trades if RBI gives the expected rate cut.
I need to
draw your attention towards rising VIX. It is now moving near 14 now after
making a low near 12.50. It was also confirmed by selling stocks like HUL and
Tatamotors. I still believe that we are near top but I am unable to say any
particular level as top. Indications are coming that we may see some extension
of rise this week.
I have
quoted this earlier also that at these kinds of levels it will be only banking
sector which will dominate. We have RBI
policy tomorrow and most banks are looking for gain. I am expecting 25 bps repo
rate cut tomorrow which market is already pricing in. Nifty may try to make
newer 52 weeks high in that process. Cross of 6101 will give us 6126 and then
may be even at 6150 levels. As long as 20 EMA saves, we cannot say for reversal
of wave.
Strategy
for Nifty January future: I have spotted 6111 for January month but
now it is looking to make a test towards 6111 levels. Cross over of 6111 will
give a move towards 6130 and then 6160 also. We will have important trading
support at 6050. You can expect first half range from 6050 to 6100+ (6111) for
the first half. Remember it is important to save 6050. I cannot say anything
for second half. Yes, we may see sharp and very sharp swings. Suppose if it
start trading below 6050 (for 5 minutes) or failure above 6111 at higher levels
will result weakness.
S&P
500
– 1504, remains a challenge for S&P 500 as of now. It is very surprising
that VIX is lowest of 5 years. When everyone says buy as everything is fine
then time comes for caution. Remember that most top forms in this kind of environment
only. I am waiting for correction to begin. I am spotting – S&P 500 will
make a top this week itself. Short – Short and Short.
Regards,
Praveen
Kumar
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