Yesterday, the Bulls must have heaved a sigh of relief. The Nifty opened higher and then languished around 4500 points. Fresh Bear raid in the afternoon tested the lows but got absorbed. Short covering in BHEL, Banking and realty stocks helped the markets to close at the day\u2019s high. Reliance stood rock steady behind the Bulls. Action was seen in some Midcap stocks which is reflected in the A/D ratio (2:1) but the volumes remained almost the same.
As mentioned, since the odds are even, the small players are not carrying forward their positions; hence short covering is emerging at lower levels. Volumes are still lower, buying support is required to threaten the Bears. As long as the Nifty trades below the resistance line of the orange channel (4670), the Bears need not worry. Short term trend is down until 4756 points is not decisively crossed while 4390 points is the pivot.
Yesterday, the Nifty crossed the required high of 4498 points. Today it has to hit a high above 4573 points (with a hurdle at 4554) for the pullback to sustain. Intraday, 4511 points is the pivot while crucial support is at 4480 and 4437 points. Again the Bears will try to tighten their grip.
traders can buy in small quantities preferably in declines around Rs.88-90 with a strict stop loss below Rs.84 in close for a pullback to Rs.99-102 in the next 7-8 trading sessions which if sustained on volumes can test Rs.108 in the short term.
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