The market seems to be in no mood to crossover 4900 on Nifty.At the same time 4800 has provided good support to the market in past few trading sessions.
The sector specific budget rallies have given a miss to the Sensex this time around.The persisting weakness and its inability to sustain at higher levels is a definite signal that one should wait on the sidelines before taking any Investment or Trading positions.
Why is it still difficult to short this market? We are still trading above the 200 dema which is placed around 4700 odd on nifty.Also the previous bottom made in Oct 2009 is close to 4550 and will provide a very strong support to the market.
Does it make sense to short the market below these levels...after having missed the fall from 4850 to 4550 if there is one? Yes. Why? Bear Markets thrive on panic and panic increases at bottoms.Well thats a scenario we will consider later after the above levels are broken the possibility of which seems very distant.
For now the trading range is 4800-4900 Nifty.
The stock can give a move to 86/90 in the short term.The RSI was trading near 50 levels in the first week of Feb and is back at the same levels although Dena Bank has made a lower top.That is a case for positive divergence.
Risk averse traders buy on dips to 76-77 with a stop loss below 75 for targets 86/90.
Momentum traders buy above 81.3 for a quick target of 86/90.Keep a stop loss below 78 after trade initiates.
Have a great trading day,
Regards,
Rahul T.
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