Nifty maintained its tight range ahead of some major events but it is maintaining the support zone of 5080-5090 so well that lot of buying activity has happened at the particular level. As mentioned in the previous posts some short positions are lying at the upper range of 5160-5170 and long positions are getting initiated at the lower part of the range. Thus a range break out will trigger a faster move and it will definitely give a trading opportunity. Technically a trend is intact as long as the reversal in price is not happening and thus as long as the immediate support zone of 5080-90 holds the short term bullish momentum is up for a with a target of 5300 on the upside. A trend reversal could happen only when the price gives a downward move by breaking 5090 and traders can think about initiating short positions. Anyway if the market rallies to higher levels it would be a clear exit signal for long positions as the volatility index would again come at a lower level that would be very dangerous for any further up move. Another concern would be the rising dollar and just because the crude oil is trading at years low the equity market does not seem to be taking that into consideration. If there is a condition were crude rises from the lower levels and dollar maintaining the upside momentum it can be a dangerous case for equities and appears to be the major risk at this particular point of time. On any upside breakout we need to confirm the up move with a confirmation of the turnover data as the volume should confirm any price movement.
Stock to watch - Maruti Suzuki
The stock is holding its support zone of 1050-60 and is expected to end its bear market move close to these levels. If nifty gives an upside break out i would like to go long on this stock as an investor by keeping a closing stop below the support zone.
Time cycle
As I mentioned in the previous post if there is an up move towards 5200
zone it should happen between 22- 25 June 2012 otherwise there is a higher
probability of prices heading down as it is not maturing with the time cycles.
Indian market is usually taking 90-95 days cycle to give an up move and we are
close to that after 25 Th of June as the last one happened in the end of March
2012.
