Overall data indicates that Nifty is in a phase of consolidation with 5,400 remaining a strong base level. The upside currently seems to be capped around 5,600-5,620 levels. I expect the Nifty to trade in similar fashion as it is really lacking any leader or trigger to take it to higher level. If Nifty future sustains above 5600 and crosses 5620 levels then short covering would take it to 5700 levels in coming trading sessions, but if unable to hold 5470 levels, then selling pressure may be seen in the market towards 5400 or even lower levels. If Nifty fails to hold 5470 levels then hedge the position by buying 5400 strike price put.
Nifty swing on Friday was within the channel of flag formed and selling pressure started once resistance was touched. There is lack of direction while trading has become difficult, but till 5635 above close is not seen things are looking very negative and advance-decline ratio for a good day is also very bad, suggesting selected stock participating in pull-back rally typical of bear phase. Nifty 5443 breaks low in 34trading days which could put lot of pressure in market and as Inverted Pole & Pennant suggest target below 5000levels in nifty can be possible, if we close below 5470. Nifty has held 5470 the whole week. Nifty to turn positive should trade above 5635. Market to be out of bear phase we need 3-4days continuous close above 5755 being 200DMA, while 100DMA is 5667.
On option front, unwinding is seen in 5500, 5600 and 5700 strike while fresh Put addition was observed in 5500 and 5600 strike which indicates strong fight between bulls and bears to get their grip on the market. Option writers are holding the market in a narrow range, now only decisively range breakout on either side would decide further trend of the market. If Nifty sustains below 5470 levels then selling pressure may get intensified in the market towards 5400 levels On upside if it sustains above 5600 levels, then up move may be seen towards 5650-5700 levels.
Technical View:
COLPAL (CMP Rs.919) : The stock is a break-out above Rs.935 on closing basis and if closes above Rs.935 then Rs.1000 can be near term target for the stock.
SBIN (CMP Rs. 2649): Stock has formed invested pole & flag formation, Break-down below Rs.2600 and real target for the formation could be Rs.2325 around levels also. Stock is trading below all major moving averages with 100DMA Rs.2683 being strong resistance for the stock.
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ADITYA SINGH
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