Last week I had mentioned about the resistance at 5428 & below 5245 selling pressure can be witnessed till final support at 5200-5166. During the entire week Nifty made a precise high of 5428 and exactly found the support at 5200 placing a low of 5201. Now this is important to note that nevertheless it precisely resisted at 5428 but also found a clear good support at the technical support line of 5200 and bounced back in a huge way with a long tailed candlestick which again signifies buying demand near the support levels. Significant accumulation of 5200/5300 strike price Put options along with ‘Out of the Money’ call options is a clear signal of participants anticipating the RBI policy in a positive frame and the week ended in a surprise CRR cut by 75 BPS.
Conclusion: Keep eyes on Nifty spot above 5458 as it will again turn back with a positive momentum towards 5600 levels. However positional shorts can keep a stop above 5458 and lower level longs can trail their stop to 5400 once it manages to cross 5458. Any close above 5406 on Spot Nifty can act as a trend deciding level and a potential reversal week. However the Union Budget may decide whether this would be a short lived rally or a fresh bull market rally.
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