Sensex Technical View :
Sensex has done the minimum bounce target of 9700. Now as was listed yesterday in the few points that a quick sharp pullback can go to 9700 minimum and 10500-10700 in short term in a more sharper one.
Fibonacci Retracements for the fall are placed at 9550/10700 /11650 /12500 which correspond to 23.6/38.2/50/61.8 retracements.
Even if markets have to reach a level of 11650 and 12500 it may not be instant and ideally in the short term buying done at lower levels should be booked partially or fully ( stock specific ) around the 10500-10700 zone and again wait for further opportunities.
A new small gap up has been created around 9300 which would be the next nearest support in coming days. So wait and watch once we reach closer to 10500 .
Stocks to watchout for :
Some of the stocks which look set for a strong counter bounce back after steep falls.
Sugar stocks like Bajaj Hind , Renuka
DLF , Reliance Infra
In the stocks suggested BOI , Glenmark investors can take partial profits in 20 % gains. Some of the strong bounce backs were seen in hindalco , ril , tata steel as mentioned, hcc and lic housing left.
Reliance Inds resistance would be seen around the 1420 and 1500 mark where one can book profits if bought on dips.
Market Observations and Thoughts :
RBI has cut crr , repo and slr which is a lot of steps taken quickly to ease the liquidity concerns in the money markets. The steps were needed for cooling of the money market rates which had again crossed 20 %. Although the swift and extent of the move will definitely give a boost to Sensex and Nifty in extreme short term. The huge covering in the end in many large caps and sustaining above 9700-9800 seemed like people were expecting RBI action as the money market concern were on.
Buy on Rumours Sell on News the standard statement continues to remain the simplest strategy. So at least buying on major gap ups or announcement based moves may not be highly profitable as risk would turn higher so wait and watch around the 10500 zone.
An interesting observation during the day was JSW steel the difference between BSE and NSE prices and then circuit on BSE and running on NSE whereas its in FNO too. Was it weird no idea or some mistake by the exchanges ??