PANIC FALL CREATES TENSION TO INVESTORS

                                                                                                              28^th April, 2008.

PANIC FALL CREATES TENSION TO INVESTORS

Market toping out around 21,000 on 10^th Jan.2008.Then afterwards market corrected sharply taken support around 15,000. In bull market 15 to 20% correction are normal. One corner of mind is favoring bull scenario and other corner of mind referring within four five days losing 5,000 points is a classic example of market topping out and in days to come will the sensex fall further more? Above doubts can be cleared one by one with the help of Technical Analysis studies and at end we’ll come to conclusion.

At present Sensex developed 2,000 point range keeping 15,300 as good support area. Here Sensex can go up to 17,300 to 17,500. Here Investor has to exercise caution and this is the area to be proved as “TREND REVERSAL” area.

WHY BULL TREND TURNS IN TO BEAR WHAT ARE THE REASONS.

1)      At present Inflation is around 7.5% and on saving bank A/c we are getting interest less then 7% which is against the Law of Economics. In future possibility of upward revision on interest rates is on cards where by Interest on Banks loan tends to rise.

2)      Mother of all Inflation is Crude oil and still its boiling on at present its’ around $100 per barrel and fear of reaching $130 to 140 is on cards.

Above are the Economic reasons. This affects each and every section of the Society. Now let me share my Technical Analysis studies with probable turning dates & Sensex range.

1)      When B.S.E. Sensex broke 19,000 area technically we entered in to the “BEAR GRIP”. Market fell very sharply and entered in to the Over Sold area. So its’ a Technical bounce or its’ just a “Relief Rally” where by every rise treated as Selling opportunity.

2)      B.S.E. Sensex already broke its 200 D.M.A.(Daily Moving Average.) This is the Bench mark in Investor community. Sensex above 200 D.M.A. bullish, below it Bearish, liquidate long term portfolio. At present it’s around 17,300. It’s a biggest

Hurdle for the Sensex to cross this level. Sensex has to cross this area with good Volume, staying above this area for at least 8-10 working days with good volume, good breadth, A.D. ratio. Equally Rally should spread to B1-B2 group not restrict to only ‘A’ group.

3)      Selling pressure can come from the Investor who has purchased shares around 15,300, around 17.300 or plus area Investor can encash 2000 point rise. (Book Profits)

      4)  In Technical Analysis we refer “Target” achieved by TIME WISE & PRICE WISE. As per Fibonachi Time Study - Beginning of May 08 & 22^nd to 26^th May 08 are Important Time periods where by Market Tops out and starts to correct.

Investors/Readers have to keep in mind Sensex Range along with its nature (Bull/bear)

1)      16,000 to 17,500plus (Bullish)

2)      Breaking 15,800 to 16,000 Alert

3)      Breaking 14,000 Sell all your portfolio/ Exit from market if 14,000 breaks market enters in to the “Bear Grip” and market may fall up to 11,000 - 12,000 or more.

Now Lets Match the Sensex Range along with T.C.D. (Time Cycle Date). Beginning of May, 08 and up to 22nd to 26^thMay 08. If BSE Sensex is not able to cross 17,500 or stay above 17,500 area then, safely assume that market will form its top “Time wise &Price wise’. Be alert and book your profit/loss. As per my studies these are very important time clusters where by on these days either market form the top or sharp fall may start. (Here 2-3 days earlier or plus can be permissible due to Saturday, Sunday and General holidays).

Ashish Thakur

Note:- This write up appear in Marathi news paper Maharashtra Times(Times group) and Loksatta (Indian Express group) on 5^th May 2008.