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Range-bound market continues. However, the
overall bullish undertone remains for the
intermediate trend. The charts continue to
suggest that a possible test of 5050 kind of
levels may well be there for the Nifty before it
clears 5150 – 5190 range.
The technical picture also remains more or less
unchanged: the Nifty Put-Call Ratio (PCR) stays
the same at 1.35. In itself, it gives a bullish
reading anyway. The open interest addition has
been fairly small to be of any great
significance. However, it is nothing unusual in
a range-bound market.
However, what we wrote yesterday still holds:
the Nifty is unlikely to get past the levels
beyond 5190 at one go. Thus, a corrective swing
is very much a possibility. We need to continue
to be quite careful of holding short-term long
positions at this juncture for it is much better
to allow the market to correct itself by about
100 – 150 Nifty points and then again settle for
the next round of upswing.
On the way down, below 5123, the level of 5077
is another key level to watch out for. A
decisive breakdown of this level would mean the
Nifty testing the support area between 5029 and
5000 becoming a high probability event. If such
a fall were to happen that would be a healthy
correction. In any case, even if the corrective
swing does not happen today, its chance of
becoming a reality would not be discounted since
5150 – 5190 would continue to be a problematic
area and would exert enough supply pressure to
bring about the much anticipated corrective
swing. Thus, we advise caution on the long side,
at higher levels of 5150, for sure.
Suppose if the Nifty starts moving up, what
would give us comfort to a large extent is its
ability to stay above 5157-level. Unless it does
so any higher level beneath that would be an
invitation for short-sellers to press sells.
Rajat K. Bose |
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All prices relate to the NSE, unless otherwise mentioned. |
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Stop-loss levels are given so that there is a level below/above, which the market will tell us that the call has gone wrong. Stop-loss is an essential risk control mechanism; it should always be there. |
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Book, at least, part profits when the prices reach their targets; if you continue to hold on to positions then use trailing stops to lock in your profits. |
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Don't chase a stock, if you are unable to buy a stock because it hits circuit levels on successive days, don't buy that. |
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The analyst and his clients may or may not have positions in the securities mentioned above. |
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Trading involves considerable risk. Trade at your own risk to the extent you are comfortable. The analyst shall not be responsible for any losses incurred for acting on these
recommendations. |
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