Nifty weekly update 21 - 24 Feb 2012

Nifty registered a new high close to our upper band of 5625 and it would still be a market to be bought only on intra day basis. It would be illogical to continue buy and hold strategy at these higher levels especially when nifty is giving large moves of 80-100 points. On the upside Bank nifty gave the first break out and lead nifty from the front and on the downward move too bank nifty should give the leading indication which has not happened yet. In a trending market like this we could see that traders were trying to catch the top and go short but got stopped out at each high but we could see substantial amount of buying in the second phase of this rally around 5350-5400 levels. Thus these levels could be considered as a base for this market rally. At these levels we could see crude oil at important resistance levels but in a rising trend and the metals like copper and nickel in a selling trend. Equity markets always witness good amount of pressure to ride the up trend when metals like copper and nickel face selling pressure. Thus now it is time to coordinate these moves to catch the further trends in nifty.The next reversal for the dollar would be above 49.90 levels and once if it is able to cross that level , 51 could be seen once again. Any correction in the current bull market could be seen as a normal bull market correction and buy the dips after a healthy correction. Keep the previous swing low of 5500 as the cushion for all trading longs and as an investors i wont go for any fresh buying at 5600 levels. As per the time cycle we have some important dates coming around March 21 and 2nd week of April. In the second week of April we could expect a major trend deciding move in Nifty. Lets keep the range as 5490-5625 and consider the break of this range for an intra day trade.