Nifty futures made a low
close to 5200 levels which is considered to be an important psychological support
zone. Though the immediate downside target lies at 5150-5130 levels it is
advised to cover short positions in 5200-5250 as said in the previous posts. Short term trend reversal
will happen if nifty is able to cross 5400 on the upside. Any short term
rallies would be sold into keeping 5400 as the major resistance zone. Though
nifty made a new low bank nifty held yesterday’s low and it suggests some short
covering happening in banking stocks.This could lead to a short term up move in banking stocks ahead of the RBI policy. An increase in premium with good open
interest and a slightly positive volatility index suggest short covering close
to 5200 levels and some long accumulation at lower levels. On any short
covering rally 5330 would act as the first resistance point and a sustained
move above this level is necessary for further upmove. SBI and Kotak bank,Axis bank are
likely to lead the upmove if there is a short covering rally. Huge sell off in base
metals especially in copper would be a major worry for the equity market to
move up. If nifty futures takes out today’s low of 5200 L & T would be a good trading opportunity on the short side.Lets keep the same range of 5190 - 5330 as it showed some respect to the lower levels close to 5190-5200.
Trend reversal
Short term trend ▼ 5130 – 5150 above 5400
