morning thoughts..

The markets opened after a holiday on Tuesday , when most of the asian peers and other markets saw a fall in more than 2-3 % in absolete percenatage terms and more severe in relative terms.
The Indian markets saw the heat today and fell more in relative as well as absolete terms and the price damage was more in stock specific and high beta stocks , but the most disturbing factor from the past few days has been the increasing turnover in volumes.
We have also indicated in past that a fall with increase in volumes is never good and comfortable , well the markets witnessed the highest ever turnover in volumes exceeding the past few months in average , which has resulted in price and chart damage.
Now the indices and the markets as a whole has run into a complete over old zone from a technical factor – but it can continue to do so , until it clears out all f/o positions and triggers margin calls.
Technically the markets are into an oversold zone and can trigger a huge reaction and a violent recovery soon , so from a trading point of view one should buy out of money call options and nifty with high beta stocks at dips.
We had alerted that any break below 5000 with volumes and a close below 4950 will trigger a steep fall , well the markets moved in the direction as expected.
But it can be said that all is not over and the broader trend of the markets has not been compromised and the markets still remains In a bull grip with strong undertone and the current wave iii is only a severe correction after a broad based rally and strong sentiment and euphoria created at 5250 -5300 levels where the markets were zittery and in reactive zone.
Historically the trends of the markets in January is always down and the returns are always negative , we have intimated this before and the current on going scenario is just a play of our words.
Now this downfall could be a probable blessing in disguise as the much desired reaction has come after a long time , and now one must try to create long positions with a medium term prospective , keeping in mind the budget , which can be supportive but not declaratory – in trend terms..
On the lower side major supports exists around 4805 levels on nifty front and the markets are likely to see a violent recovery and reaction on the upside above this levels.
In any case , if this levels are breached and broken , then the markets call for a free fall until 4440 levels.
The coming session will witness f/o expiry with volatility at its best and a probable short squeeze and short covering in 1-2 sessions with a major event of banking policy due on Friday.
The supports for the nifty is at 4805 levels and resistance at 5005 levels.
The supports for the sensex is at 16300 levels and resistance at 17200 levels.



Stocks to watch

Ivrcl infra , sugar stocks – bajaj hind , triveni etc , rolta looks good.

For a medium term – one can accumulate

Praj inds , punj lyod , lic housing ,gmdc , sail , and a straggered nifty strategy.

www.astroeyes.co.cc



Yesterday’s calls sent via sms and messenger

Secret Mascot Cadila Health Care – buy at cmp 669 sl x targets x – 2 days (booked full profits at 692 the same day)

Punter Triveni Eng – buy at cmp 123.90 sl x targets x – 2 days (booked full profits at 126 the same day)

Fii Bajaj Hind – buy at cmp 211 sl x targets x – 2 days (booked full profits at 216 the same day)

Dii Essar Oil – buy at cmp 140 sl x targets x - holding

Jackpot Rolta – buy at cmp 192 sl x targets x – 2 days (booked full profits at 196 the same day)

Warranty Ivrcl infra – buy at cmp 314 sl x targets x – 2 days (booked full profits at 330 the same day)

Warranty Escorts – buy at cmp 126 sl x targets x – 2 days (booked full profits at 131.20 the same day)

Tisco – sell at cmp 588 sl 594 targets 575 , went 553.05

Suzlon – buy at cmp 76.50 sl 75.50 targets 78.50 , went 77.95

Suzlon 75 ca – buy at cmp 2.20 sl 1.90 targets 3.20 , went 3.45

Bharti airtel – buy at cmp 330 sl 327 targets 335 , hit sl

Icici bank 820 ca – buy at cmp 6.50 sl 5 targets 10 , hit sl

Nifty – buy at cmp 4944 sl 4920 targets 5010 , hit sl

Btst Sail – buy at cmp 216 sl 214.50 targets 220 , booked the same day , went 221.25

Stbt Unitech – sell at cmp 76 sl 77.50 targets 72 , booked the same day , went 69.95