Nifty update for 27-June-2012

It managed to hold the mentioned support level of 5090 and closed at 5130+ and the price action is clearly telling that option writers have an upper hand in a market where equity traders are least interested and they are eating the premium by playing the range. Poor turnover data shows the lack of interest by traders but one cannot expect a huge selling pressure due to lack of volume. It is just testing the patience of traders by giving sideways move and for a nifty futures trader it is difficult to trade unless and until he trades the range quite well. The stock specific actions are quite promising and on any upside breakout stocks like TCS and Wipro(above previous day’s high) are expected to give a bounce and Hexaware is another good chart looks promising for an upside move. If nifty is able to break 5090-5080 (which is quite possible) SBI would be the first stock to sell for 80-100 points cut on the downside. The rollover data shows some long build up is happening in July contracts thus even if there is a break down it can be limited as long as we have multiple support levels on the downside. A range break out is inevitable to take a better trade and till then traders should get satisfied with small profits by playing the range and on any up move volume should confirm that and thus it is important to have a look into the turnover data and see what the institutions are doing. The trading range can be 5080-5200 and consider the break of the lower range to exit long positions.