Bear control. FINALLY!!

Finally the Government had given the intimation that it cannot control the inflation. HAHA how so the government realized it. After so many exports now Indian government have started importing the same thing again back in India. The big example is Onion.

Bears have totally got in control of the market. Nifty dropping and closed below 5700 and Sensex below 19000 levels for the first time since Sep 2010. This writer in the last few article has been constantly informing the readers about the impact on the market when Nifty will break below 5700 levels. Nifty finally closed below its long term support levels of 5700 and closed at 5646.

Last weeks trading session was clearly based on the technical moves. Fall from the high of 6178 on 3^rd Jan 2011 which was near the long term trendline (marked in chart), nifty within few 3 trading session closed below the 23.6% retracement and the fall continued to find support at its 38.2% retracement levels as per the Fibonacci Theory.

Indian indices tanked for one of the worst levels since Sep 2010. Nifty and Sensex closed down nearly 4.5% in a week. Midcap & Smallcap Index closed down in the range of 3-4%. Capital Goods, Bankex and Real Estate index lost over 5% in week. IT Index and Metals lost around 3.5%. In the banking space Hdfc bank tumbled down more then 10%. Banking stocks lost their grounds in fear of the rate hike by RBI (informed in last article). Hdfc Ltd lost 6.4%. Ril close down 6%. Sail after its tragic fall in the Net profit closed down at its new 52 week low. Sail planning for FPO in the coming month. Kotak bank too lost 9%, Idfc 8%. Tata steel fell 6% just few days before the open of its FPO. Infosys after its lackluster results tumbled down 5% in week. All eyes are now on TCS results. Lnt lost 8%. Hdil fell 11%. Zee announced its results this week. Icici bank tanked 4%.

The Chinese government will surely be in severe pressure to devalue Yuan against Dollar after the formers trade surplus narrowed in 2010for the second straight year. China still remains the largest car producer in the world. European Central Banks threw Portugal a temporary lifeline on Monday by buying up its bonds as market and peer pressure mounted for Lisbon to seek and international bailout soon.

Industrial growth slumped to an 18 month low of 2.71% in Nov 2010 as compared to last year’s 11.3% in Nov 2009 coupled with the high inflation pressures, impact of interest rate increase and a modernization in export growth all weighed down IIP growth during the month.

In the last week Nifty close below its 23.6% retracement. Nifty in the current week decisively closed below the 5700 levels. Nifty tried to close above the long term trendline but could not do so. In the last Nifty closed below its 50DMA and continued the fall to close at 5646 levels. Nifty will find support at 5639-5590-5540. 5540 is again its 50% retracement levels. Close below the same will take the Nifty to 5400 levels. On the upside the Nifty will face resistance at 5800. Nifty will find support at is 200DMA.

Last Weeks Call

Sell Infosys below 3350 with SL of 3357. Made a low of 3185.

Sell Rel Cap with SL of 637 tgt 625-615. Tgt reached. Made a low of 595.

Sell Hdfc Bank below 2265 SL 2271 tgt 2240-2220-2208. Tgt reached. Made a low of 2030.

Sell Ambuja below 127 SL 128.50 tgt 126-121-119. 1^st tgt reached. Made a low of 123.7.

Sell Andhra Bank below 141 SL 141.50 tgt 138-134. Tgt reached. Made a low of 129.

Sell Axisbank below 1276. SL 289 tgt 1263-1245. Tgt reached. Made a low of 1195.

Sell Biocon below 400 tgt 395-391. Tgt reached. Made a low of 375.

Sell Canara bank below 602 tgt 585. Tgt reached. Made a low of 547.

This Weeks Call

Short AB nuvo below 738 SL 745 tgt 724-708.

Short Andhra Bank below 128 SL 130 tgt 123-119.

Short Axis Bank below 1198 SL 1215 tgt 1156-1150.

Short Bharat Forge below 348 SL 352 Tgt 350-341.

Short Cipla below 339 SL 344 tgt 335- 330.

Short Cummins below 708 SL 711 tgt 697-690.

Short Hdfc bank below 2050 SL 2055 tgt 2030-2010.

Short Icici Bank below 1013 tgt 1001-995.

Short PNB below 1108 SL 1120 tgt 1091-1080.