As expected by HBJ Capital Team, Indian Market fell down sharply on Tuesday, but the intensity of fall was more than what we thought earlier. The Nifty opened today on a negative note and closed below 2,939, lower than the support level of 3,000.
The bears re-emerged from the shadows as the markets snapped their two-day advance. The decline more than compensated for the gains made in the recent sessions as the psychological blow to the bulls was bigger than the mathematical one. The fact is borne out by the steep decline in the last hour of trade and the concentration of trades in this time frame.
HBJ Capital’s View for Wednesday:-
The outlook for Wed is caution with bearish tone, because of these factors….
- Thursday is a holiday and players may not be prepared to enhance bullish commitments in times of uncertainty.
- If the overseas cues are negative, it will add to the bearish outlook. Avoid the temptation to bottom fish for now.
- Back home, the index of industrial production (IIP) data will be watched keenly. The IIP data for September 2008 will be released on 12 November 2008. Growth in core industries dipped in August 2008, tracking the overall decline in IIP to 1.3%.
So, net on net, we will either see flat market on Wed or down between 1-2%. Only if IIP numbers comes great then market will see some relief but be assured that IIP numbers will not come anything surprising.
- Traders holding SHORT/PUT on Nifty should stay with their position or book partial profits now.
- Since near term outlook is bearish one can take fresh SHORT/PUT position on Nifty in small lots. Don't take large positions.
- Investors should hold their cash and wait for every dip like what we see on Tue Nifty 200pt fall to buy 10in3 stocks or Mid-Cap Mela stocks.
Pls read this daily before trading: HBJ Capital’s 5 golden rules for profitable trading.
-JK, Equity Research Analyst.
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