SMI Market View for 11th Oct. 2012

Posted By : Kishore B.S

Friends,

The Indian Indices remained volatile today with the negative sentiments largely dominating the market participants. The Vadra and S&P scare weighed on the market sentiments sending the Realestate stocks into dizzy and the banking stocks too.
The S&P caution of one in a three possibility of further Downgrade on India to Junk status from current BBB-, ratteled the sentiments due to which the markets opened on a weak note. The markets slid further down due to the Vadra scare and the ensuing Market Speculation that Spain would soon be approaching for another Bailout, coupled with the lowering Growth forecasts of the Chinese Economy was the final sealing of negativity.
Though the positive note in the form of the GAAR retros were made sending the right signals yet they failed to enthuse the markets. The ongoing meet of Geithner, Bernanke in the Subcontinent echoing there positive vibes due to the Reforms process initiated in the last few days also failed miserably.
The charts are indicating that the downfall today has set forth the course for further fall or correction in our Indices to the sub 5600 levels in the days to come, and also making us aware that if the the 5600 levels is breached the markets could slide down to the 5500-5440 levels too.
What remains to watch out is that if the correction does set in after the mammoth rally of the last few weeks, the impending correction should be limited to the 5500 mark and given the quantum of the fall witnessed that seems unlikely and the bigger question popping out is that the current rally will too be a farce like the one witnessed earlier this year.
Though most of the participants are still echoing bullish sentiments and talking of the 6000 levels, yet the charts are speaking otherwise if does not hold on the 5600 mark in the next 1-2 sessions.

At this point in time it would be best to wait for the downfall to enter the markets or enter if the indices cross the 5800 mark on Nifty thereby confirming the trend or wait to the 5500 to create small longs …..

(Inputs: Mr. Hemanth.V, Facutly TA, Stock Market Institute – Bangalore)

Cheers!!

Team SMI

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