Nifty is retracing the rally and it is expected to complete the retracement close to 5950-6000. Options data suggesting some heavy call writing at the upper end of 6200 and 6300 but i would like to see this as a consolidation phase than a deeper sell off. The hourly indicators are in a sell mode and it breached the well known support area of 6080 but bank nifty will complete one major retracement close to 10500. Midcap and small cap indices which led the rally have not sold off like nifty did and these are signalling a cyclical upmove but only by the year end.Nifty made a halt almost on the same date of 2010 and these are well known pressure dates and the consolidation phase could last for 20-24 Dec or till first week of Jan 2015 as next important time cycles are coming around those dates. The heavy premium in nifty is telling us retailers are buying nifty on every dip and are getting trapped at every level and on any upove they would just get out than creating long positions. Thus it would take some more time for nifty to give a good rally because at current premium it is looking quite expensive. Options data suggesting some put writing happening at 6000 strike but 6100 calls are also being written , thus it would be a wait and watch game whether 6k is protected or not. Nifty is close to some important support zones and Axis bank one of the most positively correlated stock with nifty should stop falling for any relief rally. Thus i would still like to go for buy on dips approach by buying puts on any downside pressure.
On the currency front USD/ INR is on it way up and it is on the final way before heading down. EURO/USD which i am mostly concentrating than USD/INR has given a reversal on the hourly chart which is a good sign of consolidation for nifty. One stock that might make a rebound is Indus ind bank as the bank has not sold off like the others. It would be good bet if one could get it close to 400-405 band and keep a stop of 390 ( trade light to test the bottom of nifty)
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