(Chart 1- SBI, chart 2 - Nifty , chart 3- Nifty time cycles )
Nifty held the immediate psychological support zone of 5000 and gave a sharp bounce on the upside. The rally can continue to 5250-70 levels once it is able to cross 5180 on the upside before starting the next wave on the downside to 4950 levels. Thus 5180 should be considered as a short term reversal point on the upside and 5250-5270 would be the reversal points for the medium term.We could see nifty trimming the gains at the end of the trading session and PSU bank index was an under performer,it could affect the performance of bank nifty too in the coming days. We could not see any reversal patterns in bank nifty yet and for any consistent up move in nifty it is necessary for the banking index to perform. If we see the chart patterns we could see some similarity between SBI and Nifty which could be relevant in the coming days and we could watch the movement of the banking major as a leading signal for nifty's momentum as it gives a leading indication for nifty till now. Though US markets have given a new break out it can most probably be a test of the previous high and i am not expecting a major effect of that up move in the Indian equity market.
Time cycle.
As per the cyclical analysis 5th of August can be a short term trend deciding day and thus it should be watched carefully. On the upside 5250-70 can be a major resistance point and as per the cycle it could hold the levels at least 10-Aug-2012. On the downside we could see a decent support at 5030-5050 till the 06th of August.
Stock to watch
1. Bata India - The stock is forming a double top pattern with volume giving a complete break down and a break below previous low could take the stocks to 840 levels.
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