It is really amazing to see the power of correct technical analysis as Nifty encountered resistance at bang 5130 level predicted by us and thereafter reversed due to wholesale price index data not finding favour with the market as it gives impetus to higher inflation.
India's wholesale price index (WPI) rose 7.55% in May from a year earlier, driven by double-digit rises in food and fuel prices. This data sent the market in tizzy as now doubts have started pouring on the thoughts that whether RBI will undertake a rate cut or not on 18 June 2012. Despite dampeners for RBI, we hope to see a 25bp cut along with a probable CRR cut as RBI has to do do something to propel growth.
With the downside onslaught in progress, we may see Nifty heading towards the level of 5000 mark as inflation data is higher than previous month and market is showing a bearish bias. Moreover select momentum oscillators have also turned negative; which signals that if 5000 mark goes than Nifty takes support at 4950 mark. However not to worry as stock specific trading opportunities exist every day and traders who make money use hot stocks of the day which yield results as they ride on prevalent trend in the market. Moreover a positive presently in favour of the market is that it is trading above 200 day moving average (DMA).
As a free advice for the traders one can sell at higher levels and can rebuy at lower levels to get the best out of the markets which become range bound with in 400 points as is the case presently in case of Nifty which is struck between 4800-5200 levels. The market breadth in BSE ended unhealthy with 1,701 declining and 1,011 shares advancing. Internationally we see increased stress from Euro Zone and escalation of debt crisis which will keep global investors on tenterhooks as people are going for safe heaven investments like gold and this is the reason it has crossed Rs 30,000 mark per 10 gram.
Support and Resistances for the Day
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Strong future shares at National stock exchange
S Kumars, Jet Airways, KTK Bank, Piramal Health, India Info, Ambuja Cement, UCO Bank, Hind Oil, GVKPIL & Syndicate Bank.
Weak future stocks at NSE
BEML, OnMobile, Educomp, Opto Circuits, Tata Motors, Orchid Chem, Adanient, Suzlon, Tata MTRDVR & Praj Ind.
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