Nifty futures did test 5250 zone once again but gave a quick bounce back from the support zone. The volatility index gave a negative closing and the premium in nifty has increased considerably. We could see some buying happening close to the support zones and bank nifty too supported today’s move. Though world markets are in a corrective mode we need to see some buying support happening on the downside. The major worry for the equity market would be crude heading to higher levels. It would have a negative impact on the Indian equity market if crude enters a new buying territory. Base metals are still getting support at lower levels and that is really helping for nifty to hold on to the lower levels. Bank nifty would be an important index to watch out for any rally in nifty and most of the stocks might be in a process of building their short term support zones. We could not see much volume trading happening in nifty and traders are waiting on sidelines for a better trade either on the upside or downside. If nifty breaks below today’s low instead of going short I would like to wait for a buying level. One needs watch out for outperforming stocks like YES bank and BATA India on any upside rally. A negative move in the world market can have an impact on nifty’s move but the liquidity has not dried up as we could not see much volume on sell side. In a nut shell wait for a base formation pattern and nifty could remain in a broader range till the first week of April. We have some important time cycle dates close to 20-22 March 2012 where nifty could give a trend deciding move.
