October 2012

Trading levels 22nd / 26th October 2012

Last week --- the whole week was spent in a very tight rang …. From 5633 / 5725 … just about 90 points. THIS IS UNUSUAL.

NORMALLY, RESOLUTION OF THESE TIGHT RANGES HAPPEN WITH ABOUT DOUBLE SIZE BREAK-OUT MOVE IN FOLLOWING FEW DAYS.

Monday could be the day when the range will be broken. On Friday, we have seen a major reversal in US markets and chances are big that our market will replicate same on Monday. If we do not get out of this tight range on Monday, that will be a big show of strength by our market. Then there is every chance we will move up substantially when US market improves.

Result season so far is just about OK except ITC. ITC declared stellar set of numbers and justified the confidence reposed in it by global / domestic investors. Now the stock has onerous task to keep performing at this elevated level quarter after quarter lest the stock will take a bad tumble.

I wish to reiterate that I will be extremely wary of taking further long positions till we have a clear break-out again beyond the recent high of 5800+.

I maintain that distribution ( which many bulls are calling as consolidation ) is clearly evident thru large intraday volatility of 60 / 70 points with-in a tight range of 90 points.