The week past and expected
The market is under compression mode as the market is failing to trade above 5450/5470 levels even though the world
markets are doing well. As per daily chart the market is diverging negatively which is an indication of pause of the current
trend or likely shift in coming few days. Even if we look at the daily trend of the market then one can clearly notice that
it is under rising wedge formation that suggests us phase of distribution. Currently it has final support at 5350/17840 but
it seems difficult to break in the near term.
As per our past experience and findings it seems that it will spend time between 5350 and 5520 (maximum on the higher
side) and dismissal of the range will trigger "massive break out or break down on either side. We feel that the market will
break the lower band but while looking at world markets and status of the domestic currency it may even break upward
range. On the dismissal of the lower range we may expect minimum 5200/17370 lower side.
Sector specific: Banks, IT, Auto and Consumer durables may do well however, buying is advisable only at major supports
or on declines. Reality and Cement stocks one can trade on recoveries from lower levels and not on dips. Capital goods,
Infra, Pharmaceuticals and Metal stocks may find resistance at higher levels as profit taking will minimize the upside for
the same. Even midcap and small cap stocks may come under pressure of profit taking as the current move seems to be
over extended; be cautious or choose while investing at current and at higher levels.
Nifty Strategy: For the day, selling is advisable below 5430 with a tight stop loss above 5460 and for the target 5380 and
5365. In the second half, if the market sustains above 5460 then buying is advisable with a stop loss below 5430 for the
target 5490 and 5520.
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