Nifty again gave a tight range bound session after hitting a high close to 5250. It is quite surprising to see that it is coming down every time just because of lack of buying and not short selling. Volatility index gave a negative close and we could see some short covering happening close to 5200 zone. It would be a rare instance where nifty coming down by 150 points from the top and the volatility index is close to the low. The scenario explains a no trade zone for nifty especially on the short side. As we have seen from the recent lows of 4770 bank nifty was leading nifty when there was an up move. Thus logically it has to lead the way down too and i think we are close to that zone. If we look at the chart of SBI a clear distribution zone can be seen at 2200-2250 zone any up move would just confirm the top.A break below previous low zone of 2160-70 could take the stock to at least 150 points down. As of now if nifty is going to go down(which i don't expect to be a heavy fall) a trader would get good opportunity to go short on stocks like SBI and L&T than nifty. If there is a short covering wait for the rally to be over and these would be break out trades on the downside. The turnover data is still in favor of bulls and it negative closing days are with low volume and it has to establish a top soon. Though it has not achieved the price target of 5400 + levels the time has completed its cycle of up move and i expect an expiry between 5200-5300 zone. The trading range can be 5170-5270.
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