Nifty held the mentioned support zone and gave a decent bounce to 5100
zone. The structure gives us a typical feature of the range bound market with a
positive bias in the short term. Volatility data shows some long build up
happening at lower levels and take out profits close to the upper bands of 5150
– 5200. As we are close to the expiry week it is yet to see whether nifty would
take a pause close to 5200 levels. If we observe the chart pattern it is
evident that some profit booking is happening at higher levels and nifty needs
some liquidity driven rallies to have some more upside. It is interesting to
see the dollar still at 56 even after nifty rallying all the way from 4800 to 5100
and it is really a great concern for the markets. As mentioned in the previous
posts copper gave a decent rally on the upside and thus metal stocks are
holding the support zones. In the commodities market crude is in the process of
building a base around 4600 – 4650 levels and ready for a move on the upside
and in the medium term this could be a concern for equity markets. In these kinds
of tight range bound markets we could see extensions or false break outs and
these are the levels to take out small profits and exit.
