Nifty update for 10 - Feb - 2012

Nifty once again showed that it is not yet tired for any upmove and nifty futures successfully held our support zone of 5330 and registered a close at 5440 levels. Though we don’t have to buy puts on any top buy any upmove clearly from an intra day perspective and buy only out of the money options to play any upside. It is still moving very clearly through the up trending channel and till it moves below 5330 on the downside the channel looks firm. Thus as a trader there wont be much opportunity to play on the upside on a positional basis. If we see the upward channel it looks like 5500 on the upside but the channel top is moving up with the nifty, thus we have a top placed at every upmove. I had mentioned about a consolidation or trend deciding phase in the weekly post after 5th of Feb and we saw the consolidation phase only after the mentioned date. Thus if we analyze the time cycle charts next major trend deciding moves could happen on 21-March 2012 and from April 2-8. As we said in yesterday’s post the high light of today’s move was the way metal index moving ahead of Nifty. One could see major metal stocks like JSW steel, Jindal steel, Bhushan steel gaining more than other large cap stocks. We had a good turn over data showing that every dip was being bought and a negative Volatility index is showing the same. If Nifty is able to cross 5440 on the upside it could stretch 50-60 points. In the larger framework I am surely in favor of a healthy correction and expecting the major rally to happen by the second week of April 2012.From the trading perspective one could expect a little more up move as the momentum is strongly on the upside. One could watch Biocon (above 291) and Oil companies like Hind oil on the buyer’s radar.Let’s keep the range as 5330 – 5500.From the trading perspective one could expect a little more up move as the momentum is strongly on the upside. One could watch Biocon (above 291) and Oil companies like Hind oil on the buyer’s radar.Let’s keep the range as 5330 – 5500.