Another scary weekend selloff but crucial support level holds!

The market is not very exciting at the moment but this sideways narrow range movement might just be the lull before the storm. One should stay alert in the weeks ahead and not be lulled into sleep lest you want to miss a big opportunity

S&P Nifty close: 5290.85

Market Trend

Short Term: Sideways            Medium Term: Sideways        Long Term: Down

The Nifty opened flat and recovered to make a high of 5,342 points before a selloff on the weekend saw the Nifty (futures) hit a low of 5,000 points. Short-covering coupled with some speculative buying at lower levels saw the Nifty recover some of its losses to close only 42 points lower. However, it closed 83 points (1.60%) higher over last week albeit on lower volumes. A fresh trendline is drawn (in blue) which shows that it provides resistance around the current week’s close.

The sectoral indices which outperformed were BSE Auto (+5.88%), BSE Metal (+3.33%) and BSE Fast Moving Consumer Goods (+2.98%) while the gross underperformers were BSE Oil & Gas (-0.47%), BSE Power (-0.29%) and BSE Capital Goods (-0.27%).  The weekly histogram MACD remained below the median line (though it has flattened) which is a warning sign for the bulls this may be their last chance to try to pull thing back in the near future. The volumes during the recovery have been lower implying that it is corrective in nature and all in not well for the bulls even though they continue to cling on.

Here are some key levels to watch out for this week
  • As long as the S&P Nifty stays above 5,272 points (pivot) the bulls would breathe a bit easy even though the intermediate trend is sideways.
  • Support levels in declines are pegged at 5,202 and 5,113 points.
  •  Resistance levels on the upside are pegged at 5,361 and 5,431 points.

Some Observations
1.    The Nifty closed on the resistance line (in blue), hence drawn afresh which depicts that resistance is pegged around 5,290 points.
2.    Weekly averages have become positively phased and the price has managed to claw back above them, keeping the bulls hopes alive though whisker thin.
3.    Unless and until the 5,372-5,385 points range is taken out in close the bears would hold the egde and a break of the recent low of 5,171 points (in close) would set the cats amongst the pigeons.

The tug-of war is continuing for the past few weeks with neither the bulls nor the bears making any headway. Last week was the 8th week (Fib) from the top of 5,629 points and we have to see whether a small recovery during the first day or two of the week takes place, though in all probability it will be short-lived. Expect a small top on the 23rd-24th followed by a decline during the weekend. In short the market is not very exciting at this moment but this sideways narrow range movement might just be the lull before the storm. Therefore one should stay alert in the weeks ahead and not be lulled into sleep lest you want to miss a big opportunity.

(Vidur Pendharkar works as a consultant technical analyst & chief strategist at


Economy & Nation Exclusive
Indian consumers are pessimistic about the economy

A newly launched index called Consumer Confidence Index (CCI) has shown nationwide pessimism about the future of the economy

A comprehensive index known as the Consumer Confidence Index (CCI) has shown that our consumers are pessimistic about their economic future. In a first of its kind move to measure consumer sentiment in India, the overall score 39.9 was recorded for the month of March 2012. This is markedly higher than the low it recorded in December 2011 (35.8). Since then it has been trending upwards, indicating slightly better prospects, but still in bearish territory.

However, despite poor consumer sentiment (which is very different from investor sentiment), which is usually a big factor in determining the direction of the Indian economy, the stock market has been climbing and is up roughly 12% since January. Ever more so, the Reserve Bank of India (RBI) has simply done a horrific job of containing the aam admi's expectations, and even worsened their present situation.

The CCI Index is designed to measure how consumers are feeling about the economy and their ability and desire to spend across India. The index, created by BluFin, takes into consideration the present as well as the future. These so called Present Situation and Future Expectation indices each are further divided into three sub-indices measuring consumers' opinions on: a) inflation b) spending and c) employment prospects.

The Present Situation index showed a reading of 45.7, which is 0.6% lower than the last month and 2% lower over the last six months, indicating that the situation is worsening. On the other hand, the future expectations sub-index showed a 14% improvement in the sentiment over the last six months climbing to 37.6, showing optimism bias in play. However, it is still lower than the Present Situation index which is a cause of concern for policy makers and the markets.

But the RBI doesn't seem to care about the sentiments of the average Indians, especially the poor, when it catered to the demands of the institutions by adopting a loose money policy by cutting the cash credit ratio (CRR) by 50 basis points. The stock markets have been flying as central banks world over adopted the same policy. It is pertinent to note that majority of the Indians are pessimistic with regard to inflation which is, of course, hampering spending.

North India had a bleak view on inflation showing just 17.2 (whole of India being 23.5), which is extremely pessimistic. South India recorded the highest score of just 28.5. Further, inflation sentiment has worsened not just in the north, but in the east and west, as well. Over the last six months, inflation sentiment has fallen by 49.6%, 33.5% and 15.1% respectively to 17.2, 20.6 and 25.9 respectively.

Despite poor inflation, employment has been relatively stable, at 47.2, which is near neutral territory, with Kochi recording a healthy 65.1. The other side of the spectrum is Japiur- at 29.7.

On an overall basis, out of the 18 cities that were sampled, the only city that was "slightly optimistic" was Mangalore, which showed a reading of 52.6, while the most pessimistic were the residents from the Pink City-Jaipur-which recorded as low as 30.4.

The score is measured on a scale of 0-100, with 100 indicating perfect optimism while 0 is the exact opposite. This is the first time that the Consumer Confidence Index has been put to practice on a monthly basis.


Life Exclusive
Financial Literacy Course: Avoid money traps and be sensibly insured

In a first of its kind, Moneylife Foundation conducts an eight-part financial literacy programme spread over two days in Mumbai

The first day of the two-day workshop by Moneylife Foundation to delve into a complete range of issues was conducted today. Today the workshop covered issues such as how not to lose money, how to be safe with your money, responsible borrowing and insuring yourself correctly. The sessions which were attended by savers across categories and were conducted by well-known journalist Sucheta Dalal, trustee of Moneylife Foundation and Raj Pradhan, director-New Initiatives, Moneylife Foundation, who conducted an exclusive session on insurance titled “Are you sensibly insured”. Tomorrow, the day-long session will be conducted by Debashis Basu, trustee of Moneylife Foundation. He will speak on “Essential tools to grow your money”.

The first few highly interactive sessions conducted by Ms Dalal took the audience through the menace of pyramid or chain-money schemes, various Internet-based scams and unregulated schemes, credit card related issues, importance of credit history and maintaining a good credit score. She said that most Indian savers fall for tall claims and many of them fall for tall claims of pyramid schemes. Many have lost huge amounts of money in pyramid schemes such as ‘SpeakAsia’, ‘Gold Quest’, etc. There are various chain marketing schemes which operate at every level in the country and cheat even the poorest of people. Ms Dalal warned that companies like Amway, Tupperware, and Herbalife are also examples of pyramid schemes. She also spoke about the various internet scams that are usually after your money or your identity. In between the sessions Ms Dalal addressed many queries raised by the participants.

In the next session on banking safely, Ms Dalal enthralled the audience by giving real life examples of people who were not cautious and lost huge amounts of money. The examples included that of some who have done well in their careers but had ended up making financial blunders with losses amounting to crores of rupees. She advised the audience to stay away from products that promise extraordinary returns and not to get carried away by well-known personalities like film stars or cricketers who promote a particular product. Just because they promote a product that doesn’t mean they have done their research to check if the product promises what it claims.

Mr Pradhan, in his session, informed the participants on the importance of getting themselves insured. He also identified the needs of different profiles of people. In choosing an insurance policy, he said that term insurance would be the best bet. Mr Pradhan also warned the participants on the mis-selling done by agents. He also highlighted whether one should go for an online or an offline term plan. He also gave the participants an overview on annuity products and child plans and whether one should opt for these products. Mr Pradhan also covered topics relating to health insurance, car insurance, property insurance and travel insurance. He also took the audience through the various intricacies involved in buying insurance and the importance of reading the fine print.
Participants of the financial literacy course would receive certificates and free e-books on relevant issues.

If you would like to be informed of many more such events in future become a Moneylife Foundation member. Click here to register. Join Moneylife Foundation




5 years ago

Initiatives taken by the Moneylife Foundation to spread the importance of financial literacy will be appreciated. I find most of such activities are only in Mumbai and Delhi, but not in the Southern Metros. I don't the reason why. Anyhow, the participants should educate others in the matter of investments/ins. products.


Sucheta Dalal

In Reply to Gunalan 5 years ago

Many thanks for your comments about Moneylife Foundation. The reasons why the activities are in Mumbai - not even in Delhi (except for seminars in all major metros) is simple. We are 2 years old and this is all that we can afford. When we have larger corpus funds we will do more. Meanwhile we are making attempts to reach out by spending more than we can afford to video tape and upload edited versions of the programmes or important talks. This happens due to donations from those who like what we are doing. For more check
You will learn a lot of if make the effort to visit the website.
Sucheta Dalal, Trustee


In Reply to Sucheta Dalal 5 years ago

is it feasible to have online webinar type sessions where a wider variety of audience can participate? this might be less expensive, yet serve a larger purpose?

Sucheta Dalal

In Reply to param 5 years ago

Greetings. Afraid webinars cost a lot of money for technology and equipment including projectors, lights etc. More importantly, we haven't found a feasible way to make webcasting and streaming work. Afraid, it is not possible at our current resources.
best regards


In Reply to Sucheta Dalal 5 years ago

Thank U very much I will definitely check with website. with best wishes.

Madhusudan Thakkar

5 years ago

Give the world the best you have, and the best will come to you!

This calls for a celebration!

Money Life is meeting the challenge with determination, strength, and total confidence!


The future is a rainbow of beautiful tomorrows when you hold a dream in your heart! My best wishes

I'm so happy for you!

You're on your way to great things!
Money Life is all set to create silent personal finance revolution.KEEP IT UP!


5 years ago

You must release a DVD version. I would have loved to attend in person, but I stay 1400 km's away!

Ketan Lad

5 years ago

Today I have attended First day of 2 day Financial Literacy Course. The kind of knowledge that was shared was simply superb. I am into Financial field since last 10 years; but I stunned the way Ms. Sucheta Dalal conducted the worksop with all facts & figures. The course is free not beacuse it has no value, but because you can not pay the fees. Really hats off to you and your team. Picture abhi baki hai !!!
Tomorrow coming for Second action packed day.

Harshit Patel

5 years ago


I am not Registered for the 2 day Financial Literacy Course to be held this weekend, but would love to see the recordings of the same if it possible to tap the entire workshop. It will help other members who are not able to attend the workshop.


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