Nifty has crossed the reversal point above 6000 and is
expected to touch 6350 in the coming months with a strong support zone close to
5860-5900 levels. At this juncture we have to be cautious on stocks and I would
like to stick with only two mentioned stocks like Lupin and Indus ind bank (see
the previous post). If we see the derivatives data nifty futures is trading
with a marginal premium and that cannot confirm a top in the short term.
Volatility index is trading with a positive bias indicating retailers are going
short in the market but their stop losses are being taken out. Stock specific
data is telling us that there are lots of stocks yet to participate in the market
rally especially from the metal space and PSU banking space. Thus we should
watch out for the moves in derivatives data at this juncture than stock
specific ones. Options data is suggesting 5900 as a strong support zone and
technically too this can be a decent support zone. I would not like to place a
top at 6100 levels unless and until the premium reaches close to 30-35 points.
Turnover data is also suggesting low volumes on down trending days and that
shows the intensity of real selling in the market. This is a market to initiate
positional trades near the support zones and stay with it until 5850 is taken
out. Thus it is better to get out of private banking space except indusind bank
and enter long in the PSU banking space.
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