Update for 24th March 2011

 Warren Buffet Effect In Action ?

• On Wednesday, the basic cues for the market were generally negative and at the best, the indications were towards a sideways market. Crude prices had moved up in the night. The market was poised to open slightly lower too !     
• Nifty Futures opened slightly lower as expected on Wednesday. However, a small rally from the gap down open towards the highs of the previous day ( near the resistance at 4450 ) turned out to be a strong one to cross the resistance. Nifty futures closed near the highs of the day. Indian Rupee also rallied on Wednesday in tandem with the gains in the stock market.
• May be the presence of the world's best stock picker and investor, Warren Buffet's presence in India might have helped. May be some of the perceived lack of trading interest and volumes near the 5350 area too helped. ( Please note that this scenario of market not breaking the 5350 support and a subsequent rally or a test of the resistances was also indicated in the previous posts. )
• As this author had been writing for some times, most analysis and systems suitable for the trending markets are useless in the generally sideways kind of market being seen now a days.  As such, it is very difficult even to guess whether any follow up buying will be seen in the next few days or if or when a breakout may happen and it's direction.
• Therefore, no further market commentaries are included in this post barring the usual charts etc.

  Nifty Futures - Intra-day Chart

Nifty Futures  - Daily Chart 

Update for 23rd March 2011

 Nifty Future Poised Just Below the 5450 Resistance !

There has not been much happening in the stock markets off recently. Major indices and stocks are mostly trading sideways now a days. There are many reasons for this phase. Here are some of the reasons ! Stocks went northwards in to the realms of expensive valuations in the last quarter of the  previous year. Some of the stratospheric valuations have been corrected. The pivotal Stocks are neither cheap nor very expensive at present but most of them are retaining the bull market valuations still.  For example, the Nifty trailing Price Earnings Ratio, ( PE Ratio ) has corrected from the near 26 times levels to the 20 - 21 levels at present.  The so called mid and small caps have almost seen  a bear market by now. Now the uncertainty is about the adverse impact from the rising interest rates and inflation on the corporate profit growth. The small and midcaps are the first ones to fall in the face of any adversity. Now what is the future course ? Markets need conviction about the  resumption of unhindered profit growth of around 20 to 25 %. But no such triggers are seen available at present. Therefore, stocks are spending time, trading mostly in a sideways range, waiting for triggers. Until more clarity arrives or valuations become cheaper, stocks may behave like this.  No amount of analysis, neither technical nor fundamental, can be of much use in situations like these.

As there is no change in the technical position of the market for the reasons described above, this post is limited to just the usual charts, data and trading system updates. Please read the previous posts for supports and resistance levels.

  Nifty Futures - Intra-day Chart