December 2012

Trading levels 17th / 21st December 2012



Last whole week, we have been consolidating and grinding down but for Friday when we had a bump-up in the end.

NIB – National Investment Board turned out to be a damp squib. Instead CCI was announced - which is nothing but one more cabinet coordinating committee - without any real teeth.

Banking bill is not getting thru without dropping the controversial ‘commodity trading’ clause. THAT MEANS HARDLY ANY HEADWAY WAS MADE ON REFORMS FRONT IN THE PAST WEEK AND PROBABLY SAME MAY CONTINUE IN THE NEXT WEEK ALSO.

The FII flows have been phenomenally strong and that is the reason why the market has not lost significant ground.

5838 / 5840 seems to be a fairly strong support failing which we may have another 100 point slide on the NIFTY.

I said last week that some caution is called for and longs need to be protected with tight stop-losses. I hope you have successfully bailed out of all your longs keeping most of the profits intact. Below 5838 / 5840 zone, you will have opportunity to go short in some weak stocks.

Market is looking strong on monthly charts but there could be weakness emerging on weekly charts. In that situation, it is prudent to wait on sidelines as going short or long may not give a significant gain while a sudden turn around may catch you on the wrong foot.