Nifty made a new low close to 5080 and gave a sharp bounce to 5120 which cannot be considered as a valid short covering rally. We could see all the major large cap stocks like TATA steel , SBI gave a negative close indicating some more downside left in the market after some sharp whipsaws. Volatility index is giving a negative close everyday indicating the upside would be capped for a much larger time frame than expected. The European debt crisis is getting dirty every day and it could have a significant impact on Indian markets too. Commodities like crude and copper could give us a leading indication for any crisis and one should carefully watch whether crude is able to stick on to the previous low. The rising dollar index would have a negative impact on equity markets as dollar is establishing its strength once again. We could see Dow holding on to the support zone of 12400-450 and break below this could make the situation a little more uncomfortable for equity traders. We could keep the same trading range of 5050-5170.
