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Market closed quite weak yesterday, it has even breached on closing basis the 5-day moving averages—both exponential and simple ones at that. Today, we need to observe whether the Nifty once again manages to claw back above these moving average levels located at 5215 (EMA) and 5228 (Simple). If the index sustains above this range then probably the bulls might again be able to push it higher. What might affect their chances is the fact that tomorrow is a holiday for the markets on account of Ram Navami and the very next day is the settlement day for March 2010 series of derivative contracts. Generally, traders would not like to keep big positions open at the end of the day. Thus, pushing the index much higher from here is somewhat doubtful for the day.

Global cues following in a rebound in the US market are reasonably positive with Asia barring Japan is trading largely in the positive territory. The SGX Singapore Nifty is trading at 5240—both March and April series with high volumes. If Asia remains buoyant short sellers might be trapped.

In any case, on the downside, the range between 5180 and 5160 remains a very strong support area if sell-offs were to happen. On the upside, the levels between 5240 and 5260 assumes great importance now for it is likely to bring in fresh supplies, and only when this range is decisively crossed we are likely to see sustained rally that might take the Nifty beyond 5310 going forward.

Rajat K. Bose