Market Strategy Toady

RaahiShah Mon Jun 04, 2012 4:12 pm

Red ticks are set to invade your trading screen, as concerns about the US economy and slowdown in China add to ongoing problems in Europe. Domestic problems have only got compounded with the dismal GDP report.

The much weaker-than-expected US jobs data has raised fresh doubt about the health of the world’s largest economy. The S&P 500 index is below 200-DMA while the Dow has erased its gain for 2012. The S&P 500 and the Nasdaq are down over 10% from the year's highs.
Flight to safety continues, with investors flocking to US treasuries and gold. With every passing day, investor confidence is taking one knock after the other.

There could be more pain in the near term, as policymakers across the globe struggle to address their economies woes. Stick to a defensive portfolio as there doesn’t seem to be any safe place to hide.
Technically: The Nifty last week succumbed to fresh selling pressure and formed a bearish engulfing pattern on candlestick chart. It thus violated a long-term trend line support below 4860 levels. A move below 4788 will lead to breakdown below the three week's low and would be suffice to aggravate selling pressure in the near term.

Key Results Today: Bilpower, Denso India and Eveready Industries.

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