Nifty update for 28-Feb-2012

Nifty had a deeper cut below our support levels of 5440 and is touching some major support zones at 5330-5350 levels. It would really be a testing time for Nifty and it would be a wait and watch game whether it could hold these support zones. If we look at it as a corrective move we only had a 300 points cut for a 1100 points rally and it should be treated as a normal correction. As I was mentioning in the previous post we could get the first leading indication about the market direction from two major stocks they are Jindal steel and ICICI bank. These stocks did some serious damage to Nifty along with SBI. The banking biggie could not hold on to its support zone of 2200 and far below the support zone and it should be considered as a major threat for Nifty. Crude oil and dollar index would give some serious problems for Nifty on the upside. Thus for new buyers , you need to wait for the market to settle down and the first upmove should only be treated as a short covering and don’t get excited with any upmove. Our next Fibonacci number lies around 5240 levels and ideally that should be an ideal support zone. These support zones should be considered as places where one should cover his/her short positions and wait for the next move. Dollar has got enough time to move up and a move towards 52 zones could not be ruled out. As of now FII’s have not started their selling and it could be a tricky market at this point of time as there are yet some more moves left on the downside. f we examine the previous weekly posts 5330 would be an important area where Nifty did some base building process for the upside move and below that it could lead to 5240-5250 zones, but if nifty cracks below 5330 zone one could start covering their short positions close to these levels of 5240-50.Let’s keep the range as 5250-5440.