MARKET UPDATE AS ON 31.8.10

update as on 7.9.10

on crossing 80% retracement level short covering and new long positions took market again today at top of channel.some profit booking may be seen here.

80% retracemnt zone (18350/5515) which was resistance previously may give support.

stop loss for long positions at 17820/5350

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update as on 31.8.10

today we broke channel referred in chart dated 27.8.10, broken prev top made at 5367, broke 50dma / 50 ema zone all on intra day basis , tested critical support zone of 5350 also ( EXACT LOW 5349) and came back in the channel on closing basis.

since we r retracing from 5550 zone as discussed earlier and we have seen broad based selling from there only we shd be cautious for all long positions, we should not buy considering simply cheaper than higher price seen before.

as discussed we have seen smart money chasing defensive stocks like pharma, fmcg and power stocks.today good up move was seen in all major fmcg counters when mkt reversed from 5350.

retracement levels where we may get resistance in up move in coming days which may be used for generating cash.

38.2 % 18070/5427

50 % 18148/5450

61.8 % 18225/5473

80 % 18344/5510

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20.8.10

my view is to alert all that we are poised at critical point in market. at a resistance of a channel running from long time and at critical fibo ratios time wise and price wise which can change direction in market.if this top of 5545 is crossed decisively then only we can see bullish moves immly otherwise chance of correcting are more.

us dollar index is on up move after correcting up to expected 80/82 zone and on crossing 83 again it will bring more n more weakness in us markets and up to what time we can be decoupled ?most of global markets have started weakening. liquidity is a driving force to sustain bullishness. when valuation are attractive in other markets or assets liquidity will shift and that can bring corrections.

better to move to defensive bets like fmcg/pharma/power time being for preservation of capital with some appreciation.let KING MARKET decide its direction.price has not shown any weakness. higher high and higher lows are seen.

one more technical matter, island reversal seen after first up move when lower top of 18895 was made (after top of 21206) is just filled. will we cross this zone?

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18.8.10

NIFTY STILL IN CHANNEL. LOOKING AT RED RESISTANCE LINE RESISTANCE MAY COME BETN 5520 TO 5560 APPRX.

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VIEWS OF MADHU KELA

DEAR INVESTOR

Hinting at near doubling of investments made in stocks, Anil Ambani group's renowned fund manager Madhusudan Kela has predicted that the benchmark Sensex will cross 30,000-point level in the next 3-5 years. Although cautious about the market outlook in the next three months, Kela told PTI that he was highly bullish in the longer term.

Kela will be taking over as the Chief Investment Strategist at Anil Ambani group's financial services arm Reliance Capital from September 21, following his elevation from Head of Equities at Reliance Mutual Fund currently.

"I am bullish about the stock market's performance in the medium to long term and expect the Sensex may even go beyond 30,000 level in the next 3-5 years. FII inflows are also expected to be robust in the long term," Kela said.

A surge in Sensex to over 30,000 level, from near 18,000 points currently, would mean close to 100 per cent rise in the next 3-5 years.

However, he is bearish about the short term and thinks the stock market may be impacted if FIIs start selling amid uncertainty in global markets.

"I expect the stock market may see a correction of around 10 per cent in the next three months if FII inflows, which are fuelling the stocks at present, become subdued. And there is not enough demand from domestic investors to keep the market afloat," Kela added.

Foreign Institutional Investors (FIIs) have poured in as much as Rs 11, 447.60 crore so far in August, according to data available on the Securities and Exchange Board of India (Sebi) website.

With improving global economic conditions, the FII investments have been robust this year with their total inflows close to Rs 60,000 crore so far in 2010.

The BSE benchmark index Sensex had settled at below the 18,000 mark at 17,998.41 down 227 points on Friday last week.

From January to August, the Sensex has been moving mostly in the range of 16,000-17,000 levels, though it had touched its highest level of 18,475 points for the first time since February 2008 on August 19.

Asked if Indian equities at present were overvalued as compared to their peers in BRIC (Brazil, Russia and China and India), Kela said, "foreign investors are still bullish on Indian stocks as they are still under owned by them as compared to Chinese equities."

With his new responsibilities, Kela would play a crucial role in expanding Reliance Capital's businesses, mentoring portfolio managers and providing strategic inputs and guidance on investments across the RCAP group of firms