The markets are likely to open on a positive note, however, selling pressure at higher levels is not ruled out. The trend deciding level for the day is 5,853/19,490. If the NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 5,964/19,804.However, if the NIFTY trades below 5,853/19,490 for the first half-an-hour of trade then it may correct up to 5,665- 5,553/18,948 -18,635.According to Deepak Singh, editor State of the Markets the break out above 6,000 for Nifty and 20,000 for the Sensex was false breakout - It is also called "bear trap" because it first creates complacency in bulls and then shake them up. In this pattern, the market first breaks out above key resistance level creating lot of enthusiasm on the long side. The money waiting on the sidelines also jump in - in anticipation of strong up move. But very soon market fizzles out in absence of follow through buying. As a result, the weak hands start liquidating breaking the market down. And then starts large scale selling on account of unwinding of long positions and aggressive short build-up. The short build-up is generally not speculative but created more for hedging by institutions. Yesterday's selling has not only damaged the charts but also the sentiment in a bad way - I am talking of large caps. Right now, Indian markets are oversold and hence a bounce from current level should not surprise anybody, but the issue is - How the yesterdays sell off has impacted the trend of the market?
