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TRADING STRATEGY FOR 19th APRIL 2010
(Based on technical by R D DANGAR)
Markets cautious ahead of RBI policy meet
The market last week closed in the negative on profit taking in front line stocks and the over two month rally was snapped. The stocks belonging to the financial and power /energy sector remained laggards and closed weak. The Sensex, which surged over 2,000 points, between the first week of February and April 9, finally closed last week at 17,591 losing around two percent. Meanwhile, market participants expect that the RBI may further tighten monetary policy to contain inflation at its meet tomorrow. The apex bank may also hike key policy rates by at least 25-basis-points and expected to revise requirements on bank lending to the real estate sector. Further, investors will be keenly watching the progress of monsoon this year and await the forecast by the Meteorological Department which is usually made in the second half of April after considering weather observations globally. Major corporate Q4 results this week will also be crucial to set the trend of the market. Meantime, FIIs remained buyers of equity and have invested more than 25K crores this calendar year
NIFTY FUTURE (Last close 5262.60)
The markets show signs of correction with the weekly closing being in red if compared with the last weeks closing for the indices. The medium term trend though remains intact the short term trend is expected to be corrective. This correction is expected to be an overall correction for the markets. STOCKSBHAVISHYA charts knew that the correction was coming and this time too the charts displayed this – the same can be read in our daily newsletter for Friday morning. Goldman was charged later in the day on Friday.
As mentioned technically the markets seem ripe for a correction. Intraday could be choppy and volumes would remain missing. To add to the technical development and the fraud charge against Goldman Sach we have the earnings season underway which would add to the volatility.
Technically watch levels of 17337 – 17061 as supports for the Sensex and 5187 – 5101 for the Nifty. If these levels are cracked then the markets could even move further south wards to test the levels at approximately 15800 for the Sensex and 4800 for the Nifty. On the higher side throughout this week the markets are expected to face resistance. Market players should concentrate on supports as of now. It is time to rework on your portfolios, decide their stop losses and act accordingly.
HOLD A LOW PROFILE…
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