Nifty finally broke out from the range and reached the mentioned upside
band of 5300 without much difficulty. As of now we could see 5090 as the short
term bottom and any dip towards 5200 could attract lot of buying and the bias
is still on the upside. The extended upside target could be around 5470 levels
with a reversal below 5090 on a closing basis. On the upside Nifty could first
move to 5350 where we could see some supply coming in as it tells you about
some weekly resistance levels. Thus 5350 is the level where one could book take
out some profit and wait for an entry levels close to 5200 -5180 levels. On the
downside 5090 levels could be held as the options data is still favoring that
zone.
The only worry could be volatility index could be close to 17-18 levels
if nifty is going to hit above 5400 levels and one could see a bigger range
bound market or a market with downward bias after that. As a nifty trader it
makes sense to be on the long side of the market and buying on dips and allow
nifty to make to make a top to going short in this market. In the commodities
market too copper has given a good breakout on the upside indicating some more
up move in metal stocks especially the ones like tata steel. Dollar/INR is
close to an important support zone of 55.30-55.40 and it is yet to see whether
it would break that zone or not. At this
point of time rather than going for nifty reaching 5470 levels read the
volatility index levels to place the top and watch out for 17-18 levels as a
major point where one should start exiting the trading longs
