You must
read previous articles and watch the given chart carefully to understand this
article completely.
For 11
March 2014: -
On 10
March 2014, FII Bought INR 1253.65 crs and DII Sold INR 1044.82 crs
Once Nifty
hit new all-time high it has not given any sign of pullback yet. For yesterday
I have quoted for resistance at 6560-6600 which found to be interesting. It must
be the fundamental which should push the rally higher but we have not seen many
changes there. Since the low of 6216 we have not seen even single negative closing.
It is heavily over bought now.
We saw
good buying in heavyweight like SBIN, Reliance and many other PSU banks too. There
are few strong reasons to see this breakout and rally with some doubt. Have a
look at fear index VIX. From the low of 12.50 it has shoot up and now it is at
17.77, almost near to 18. Yesterday also, it was high by 6.30%. In normal
market condition, it should be trending lower.
Above fact
suggests that higher number of market participants is under panic even after
new all-time high and that panic is rising with rise in stock market. Can stock
price go higher in panic? Basic of technical analysis suggests that that rally
can be short seller driven. Remember, we are not talking about market like US
which has greater money support. In India, it is only FII which are buying
right now.
In clear
words, if VIX crosses 18 then I definitely cannot see the possibility and scope
of further rise. Still, it is the price only which pay to traders and that it
still higher. If I am concluding something using VIX then also I have to accept
that trend once established cannot be easily violated. Nifty can still try to
move higher (resistance 6560-6600) with support at 6490-6480. If it breaks 6480
on downside then we can think about substantial pullback. Till then, trade
less.
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Strategy
for Nifty March future – Where is the scope
of pullback? It is not giving room yet to play for pullback even after 350
points of sharp rise. I suggest waiting for something decisive to happen for
intraday traders. On other hand positional traders can slowly load shorts at
these rise. Intraday at these can be difficult and dicey. If market trades in
positive zone, then avoid deals. Yesterday’s high of 6595 will act as still
resistance.
S&P
500
(USA) – It has opened lower and hit
1867 yesterday but finally closed at the highest point of the day at 1877. I
still feel that as long as it is above 1850 we cannot do much on optimism rise.
This may be the zone of consolidation. Outcome of this consolidation is still
beyond the scope of prediction. Most of trading activities has shifted to small
cap stocks which generally happen near peak of the rally. It is the tempted
money phase of current rally. I suggest be on sideline until some momentum
comes for trading.
