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A wide ranging day with a close deep in the
opposite direction generally suggests a
directional change; however, it does not
preclude a partial retracement of the large
swing. In fact, it is more natural to have
smaller counter swing acting in pursuit of
balancing the interplay of price and time.
Today, the ground is set for another piece of
pitched battle between the believers and the
skeptics. The stage for that would be the Nifty
range between 5143 and 5184. These forty points,
today, assume an importance akin to the four
center squares on a chess board: whoever gets
the better of this range would secure and
fortify their position and go a long way in
controlling the direction of the market in the
near term.
On the downside, the range between 5126 and 5120
continues to be a strong support zone yet the
battle of foot soldiers, as we anticipate, would
be fought between 5143 and 5184.
On the upside, above 5184, the level of 5201
would pose a lot of difficulty for the bulls the
index forward. A decisive close above this range
would mean clear dominance of the bulls and, on
the other hand, a firm close below the level of
5120 would tilt the scales in favor of the
bears.
Below 5120, the levels to watch out for would be
5088 and 5056. On the upside, above 5201, the
levels would be 5250 and 5278.
This overhang of weakness, if there is a
decisive close below 5120, may last up to
tomorrow and there could be a fresh flurry of
emotions of panic and a revisit levels close to
5050.
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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