Lack of enthusiasm.

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Dear Investor,

We lack enthusiasm right now. NIFTY chart below is a summary effect of overall stock market. After three up days we are taking a pause here. This will be a key resistance point. But if you scan individual NIFTY components you will see a lack of enthusiasm. Most of these stocks are trying to reach their 150 day average line down. These are slowly correcting. So the panic sell off we witnessed might not be the last before a final bottom is put.

Have a look at what FII's have done since Nov 12 2010.

I see that net inflow of cash into market is slowly turned toward less positive or little bit negative.

US dollar is slowly gaining strength that is harmful to stock market rally because it pushes the FII to sell stocks and buy US dollars. The strength to dollar is coming from weakness in Euro. US dollar chart is looking more bullish because it did not reverse quickly after the rally. After few days of selling it is holding its value. If EURO picture deteriorated and dollar strengthens then we will have a deeper correction and probably good prices to buy later.

On positive note - Hexaware is near breakout point so can be added to watchlist.

Thanks
Anil
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