Nifty made a low of 4767 which is
considered to be a decent target on the technical charts and bounce back to
4900 levels. We had a downside target of 4800 and were waiting for a sharp
recovery. It is expected to trade till 5030-5050 bands by taking support at
4800 zone. Thus the bounce would give some time for short sellers before the
next leg to 4500. U S markets are trading close to the 200 DMA (the so called
support zone) and can give a temporary bounce from these levels. If nifty is not
trading till the upper bands and take out the low in the initial trading
sessions itself we could see that as a buying opportunity as the degree of
decline was so severe. If we have a steep fall like this market is likely to bounce
but retest the bottom and make a double bottom at lower levels. Dollar / INR have
made a new high and it would attract buying interest on every dip. Thus the
structure of nifty actually supports a pullback rally and the most beaten down
sectors like banking and metal could lead that. The overall structure looks
like it is ready for dead cat bounces like this and expected to test the previous
low zone of 4500 in June series.
