Nifty witnessed a profit booking session in the previous week and it gave a closing above our lower range of 5440. Though we could see some profit booking in banking and metal space Nifty is holding the important support levels at 5440-5450 levels. At this juncture it is important to have a look at three stocks and they are SBI, ICICI bank and Jindal steel.I had mentioned about the importance of SBI holding levels of 2200-2250 levels on the lower side and it held those levels till friday, but we could not see any short covering happening in the stock as of now We need to see whether SBI could hold these levels for any upside momentum in Nifty.Other two stocks, ICICI bank and Jindal steel are highly positively correlated with nifty and we did see some short covering happening in these two stocks. Thus any further upside momentum in these two stocks should be considered for any up move in nifty.These stocks have around 95-98 % correlation with nifty if we check the data for past one year and it would be an important indicator for any upside or downside move for nifty.If we see the attached chart(click on the attached chart)Nifty is hitting some important angles on the hourly chart which provides a decent support. Thus a break below the mentioned support levels could take nifty to 5350 levels and will show the first signs of a corrective move in nifty. We did mention about the bottoming out of crude in the previous weekly posts when it was at 4900 levels and could see a massive upside in crude to 5400 levels.It is quite surprising that the upward momentum in crude is not affecting nifty and dollar. On the way ahead it is clearly a negative signal for nifty but base metals like copper and nickel are getting some support.We should wait and see whether the supports are relevant and it could sustain in the coming days. Long positions could be made only above 5560-5570 zone as some short positions will get covered in nifty.As per time cycle we have important dates coming around 21st of March and i would expect the next major rally in a time period between 2-10 April 2012.Lets keep the range as 5440-5560 .
