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AFTER making the recent low of 4786, the Nifty rose to test a high of 5148 in the previous week. It remained choppy for three trading sessions before rising smartly on Wednesday.
The Nifty is likely to move higher in the next couple of days and may face some resistance at the 50DMA level of 5152. A breach of this level may see the Nifty heading towards the stiff resistance zone of 5190-5220. On the downside, 4960 is a very strong support in the short term.
In the large cap segment, RIL, L&T, Tata Steel and Jindal Steel & Power may rally in the next couple of days. IT and banking stocks are likely to remain subdued. It would be prudent now to have hedged long positions in the short term. If the Nifty sustains above 5220, then only signs of strength will emerge. The broader range for the market over the medium term is likely to be 4780-5220.
Profit-booking took place in Nifty Call options of strike 5000 which shed open interest by 15664 lots while Put writing was also visible at the same strike which had a buildup of 34168 lots. Volatility index is currently at 26.50 and appears likely to decline over the next few trading sessions.
Reliance Industries, IFCI, Divi's Labs and BRFL are some of the stocks which had a long build-up on Wednesday and may exhibit strength in the near term. On the other hand, short-covering is also likely in metal stocks like Tata Steel, Hindalco and SAIL.
Vinit Pagaria
VP-investment strategies
Microsec Capital
The Nifty is likely to move higher in the next couple of days and may face some resistance at the 50DMA level of 5152. A breach of this level may see the Nifty heading towards the stiff resistance zone of 5190-5220. On the downside, 4960 is a very strong support in the short term.
In the large cap segment, RIL, L&T, Tata Steel and Jindal Steel & Power may rally in the next couple of days. IT and banking stocks are likely to remain subdued. It would be prudent now to have hedged long positions in the short term. If the Nifty sustains above 5220, then only signs of strength will emerge. The broader range for the market over the medium term is likely to be 4780-5220.
Profit-booking took place in Nifty Call options of strike 5000 which shed open interest by 15664 lots while Put writing was also visible at the same strike which had a buildup of 34168 lots. Volatility index is currently at 26.50 and appears likely to decline over the next few trading sessions.
Reliance Industries, IFCI, Divi's Labs and BRFL are some of the stocks which had a long build-up on Wednesday and may exhibit strength in the near term. On the other hand, short-covering is also likely in metal stocks like Tata Steel, Hindalco and SAIL.
Vinit Pagaria
VP-investment strategies
Microsec Capital
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