Nifty respected the major
resistance zone of 5100+ levels and closed on a negative note at 5040 levels.
It is expected to trade lower till 4950-70 zone where it can attempt a bounce
back as lot of long positions got added in that region. If we have a look into
the turnover data we could a huge increase and the institutional volume was
less. Thus it could be interpreted as lot of retailers got trapped in their
long positions above 5100. On the downside 4950 – 70 zone could hold as some Fibonacci
numbers are lying close to that and nifty’s current up move got the real
momentum from these levels. Thus it would be crucial whether nifty could get
support at these levels. In the currency market dollar/Inr is bouncing back
from the support zone of 55.40-.30 zone and nifty would be under threat till these
levels are broken on the downside. As you see in the chart nifty has already
completed a 5 wave cycle in the short term and it is yet to see whether the up move
would be a secondary rally to confirm the top or a fresh move. There could be a
chance for reversal in the medium term as long as 4880-4900 levels hold on the
downside and the bulls could have an upper hand till these levels hold. In a
nutshell the levels of 4950 – 70 are not to go short and as a trader it is
worth taking a chance on the long side if the levels hold on a closing basis.
Volatility index saw an uptick with decent volume and open interest and shows
some short positions are getting accumulated at higher levels. The trading
range would be 4960 – 5100.
