On Thursday the market opened up with a gap above previous closings and has maintained the positive momentum till end
of the session. Sustenance of the market above 4800/16065 level indicates short term strength, however, the medium
term trend is still negative and we may consider it as a pull back rally (exit opportunity) to the bear move between 5310
and 4675 levels.
The volume indicator is still below the daily average traded levels. The major oscillators like RSI and ROC are in the oversold
region but the positive divergence is still missing that means there is no change in existing (bearish) trend. On weekly basis
the market closed above the previous week's close may be due to extreme support of 40 weeks SMA. All this indicates that
short term rally is due but it will remain short lived. We may expect the market to reach 4900/4920 (16470) maximum on
the higher side if it sustains above the level 4840 during week. In case the market sustains below the level 4840 then it
may slide to 4780/15990 minimum on the lower side.
Sustenance of the market below 4780 level during the week may lead to continuation of the weakness and in that case
we may expect quick sell off to 4600/4580 (15330) levels. These levels seem to be achievable in the near term as many
index components (stocks) are supporting the same.
Nifty Strategy: Buy Nifty between 4800/4795 with an immediate target 4840 on the higher side. Keep a final stop loss
at 4770 for the same. In case the market opens higher and moves to 4840 levels then the strategy should be to sell short
between 4830 and 40 with a tight stop loss at 4860. In the second half of the trading session 4840 and 4780 levels may
act as a crucial trend decider levels. Sell short if it trades below 4780 and trade long if it sustains above 4840 in the second
half of the trading session.
