Indices
Tuesday, July 30, 2013
INDICES:
INDICES: IT’S WARNING NOT A CONCLUSION, BUT CAN’T BE TAKEN LIGHTLY:
(BE CATIOUS AT CURRENT LEVELS):
As anticipated, we have seen Wave-Z Upward rally in the market. It has achieved all short term targets. Sensex made a high of 20,351.06 levels & Nifty made high of 6093.35 levels, achieved but both remained truncated & short of my medium term target as expected i.e-20800-21200 in sensex & 6300-6350 levels in nifty, that’s surprising & not seen before or else my wave count marking needs to be changed.
But in this rally, we have seen that participation got further narrowed down to very few stocks & sectors. Recent rally mainly driven by Stocks of FMCG, Pharma & Information Technology Sectors & RIL from Oil & Gas Sector etc, Rest of the sectors like- Banks, Metals, Infrastructure, Capital Goods, Reality, Power etc were remained underperformer & weaker.
Infect, Sectors like BANKEX, not even retraced 38.2% in recent rally & remained the most underperforming sectors V/S main Index ( Nifty/Sensex)as per comparative chart attached here. Bankex already broken trend line support as per chart attached indicating similar kind of possibility of sharp fall in main index ( sensex/Nifty) ahead. The other Indices like- MIDCAP & SMALL CAP etc also remained underperformer in recent rally & they were already leading on the way down & broken recent lows of June-2013 this year aliening with (5566.25 levels in nifty& 18467.16 levels in sensex).
These are initial evidences showing “DARK CLOUD” for further UP trend from here on. It looks Tough for market to reach medium term targets unless situation & circumstances change as mentioned above and this can be possible end of big distribution of this Bear market rally as per my main view from wave count perspective.
Same way, there are few evidences still in favor of Bulls. Monthly KST, weekly KST both momentum indicators are still in BUY. Market is still trading above 20WSMA & 40WEMA. Nifty & sensex still holding trend line support along with medium term reversal levels ( as mentioned below) as per chart attached & lastly whether current structure of fall is corrective or impulse in nature to reach final conclusion of medium term Trend reversal.
So will the main Index (Nifty/Sensex) is going to catch it up soon on downside??
That’s a question still not finally confirmed but many evidences as mentioned above is showing that possibility. It’s still at 50:50; therefore, don’t want to pre-empt in hurry call it as TOP till it finally confirms & as per title of my mail take it as “It’s Warning not a conclusion, but can’t be taken lightly”. One should be cautious at current levels of market.
Close below 5600-5650 levels of range in nifty & 18600 levels in sensex will finally confirm the same about major TREND REVERSAL IN THE MAKRET & we are going to see further lower levels in market.
And if its beginning, then worse is still ahead, in that case we are heading for final climax stage of this Time wise bear market for the lower levels tgt1-5230, tgt2-5030, tgt3-4800, tgt4-4500 levels in nifty & tgt1-17300, tgt2-16700, tgt3-15900 & tgt4-15100 levels in Long to medium term.
One should avoid BUYING stocks of Underperforming sectors like Midcap, small cap, Bankex & many more till this correction gets over or any kind of evidences or confirmation visible about further positive medium term outlook of overall market.
So conclusively, it’s a test of patience till it confirms but its warning that can’t be taken lightly. One should keep CASH in Fixed Deposit as a reserve & wait for right time for Investment opportunity for Next bull market i.e. going to start after completion of this last phase of this Time wise bear market, and those who can mange to protect their money will be WINNNER to grab next big opportunity esp. in equity market.