Nifty held the upper resistance level of 5730-40 levels and gave a negative closing just before the holiday. If we look at the chart of S&P a major technical support zone has been broken around 1425(the lower end of the range mentioned yesterday).It would be headed lower till 1395-1400 zone from where a bounce could be expected but the long term charts are losing the upward momentum and could be worrisome for traders all around the world.Dollar index is also heading towards 81.5 zone where equity traders would face a tough time ahead. Thus if we look at these kind of correlations the world market let it be FTSE or S&P it is dangerous for Indian equity market.We have a near term support zone close to 5630-40 and a decisive break below these zones would confirm the weakness and if it happens banking stocks are expected to correct first especially PSU names like SBI and Bank of India.Another stock which is trading below the long term upward channel is BATA India. The stock was making higher highs consistently for the past two years and the long term trend is expected to turn bearish below the previous low.If we look at another possible scenario of nifty breaking 5730-40 on the upside stocks like Reliance Infra , LIC housing, Wipro are expected to move higher. The 100 point range should be watched carefully and it is wise to take trading decisions based on major large cap stocks in specific sectors.As of now the rollovers are not showing major long additions in all the major sectors.
Time cycle analysis
If we look at the current rally from June we could see that close to 25-26th October the rally can get matured as it would complete 144 days from the bottom. 144 should be considered as an important number if we see the current cycle.An important date would come between 5-11 of November and the emergence of a major trend can happen between these days. Usually the day after expiry is crucial and a major trend deciding move can happen these days too.In a nutshell we have two important dates after the expiry and till 5500 on the downside the bullish trend is intact as there is a higher top higher bottom scenario
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