Though nifty crossed 5330 it gave a weak closing and thus it cant be considered as a valid break out. It was not a sell off from the top because there was no reduction in the premium and the volatility index was closed on a negative note. As the open interest was comparatively lesser than the other days it was evident that it was not a sell off and just reflected the weakness in the world markets. If it continues to go down we need to watch for 5230-5240 levels as lot of buying has happened at that level. Bank nifty did not contribute much on the positive side and that still remains a worry to break out on the upside. If it has to break out on the upside it has to happen with in a day or two as 5400 calls are gaining lot of volume day by day(it indicates lot of call writing happening at this strike) .As of now it is still a wait and watch game for a trending market. The bias is still on the positive side just because even if nifty falls 50-100 points stocks would go back to their previous support zones and if it gets some more time to add buyers that would have a positive effect. If it is a heavy fall lot of buyers has to get trapped on the wrong side and it has not happened yet. Thus a strong closing is needed for a meaningful break out but i would like to take a chance on the long side only if the closing is much above the lower zone. Dollar/INR is still stuck at 51.80-52.00 zone and it has to cross 52 levels for any upside move.If it is crossing 52 levels on the upside it is telling you to wait for some more time to go long in equity markets. Lets keep a range of 5230 - 5360.
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