Nifty held the resistance zone and one should consider the reversal only above 5660 zone and till the trend is negative and there are no signs of further strength as it was really evident from the way USD/INR was performing. As mentioned in the previous post 5600 call again made a high just above 60 and it is giving enough time for options writers to sell the call at 60 levels and thus 5660 remains a crucial resistance as per the technical charts and derivatives data. The major reason for the dull movement is the lagging metal index and we could see stocks like TATA steel, Jindal and JSW are almost dead, once the momentum starts picking up in these stocks nifty could inch up to 6000 levels and i expect that to happen around 20th of December or 4-5 th of Jan 2013. Traders are so optimistic that they are not allowing the market to go in a complete sell mode and that is acting as a cushion for all long positions. If nifty is able to cross 5660 that can probably be a whipsaw as it is ahead of the expiry season. Thus we could definitely have trading opportunities in banking names and wipro.Bank of India and Biocon are the best ones on the long side (above the previous highs) if we are able to cross the resistance level.One important development that has happened in the inter market co relation would be Dollar/INR hitting new highs and moving close to the tough resistance zone of 56 from where it actually started falling. Thus a lot of selling can emerge close to 56 zone and that can be helpful for nifty to stay in a range for some more time. There is no doubt that dollar index and nifty are in an uptrend and there is no way that both of them can resume the uptrend at the same time , one has to slow down and that is the way it works.
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