Nifty made a new 52 high close to 5760 which is close to an important square which could act as a hurdle in the near term. If we analyse the charts as per pure quantitative methods we have targets like 5776 and 5850 levels and we are close to those two targets and thus i would not be creating any new buying positions especially in the stocks that have rallied in the previous month and that would be the banking space. As the momentum is so strong and the momentum indicators are still in a buy mode we could assume any downfall as a normal profit booking or consolidation period. Any sudden upmove if remains within a consolidation range could be treated as valid and an upmove without any breathing space would be treated as a bubble to suck the wealth of public. If we analyse the current upmove except tata steel all the major largecap stocks have given a decent performance and on any correction tata steel would be my first pick as i would assume the stock is spending more time in the accumulation phase. A stock which is forming a good base pattern should be the darling of traders and should be picked when it is ripe.
Time cycle analysis
Before nifty making the current upmove it made a low on 5th of September 2012 and we are now on we have completed the month of September and the time and price are close to squaring off or the first cycle of upmove is getting matured. Even if there is an upmove close to 5800-5850 levels time would be just matching or overshooting the price and any upmove can be considered as points to exit. As the chart says there would be multiple support zone close to 5630-5650 levels and test of these levels could only be treated as a 'throw back' and most probably it could happen within a week's time on or before 09th of October or it would mark the high of the month and thus first week of the month would remain crucial for traders to decide the trend. If we have a downward move we could see the upmove again as it would be range bound session then price has to shoot up to 5850 levels to match the time in the second cycle. In a nutshell the broader range for the month can be 5520-5850.
