The markets yesterday witnessed typical derivatives expiry session, as stocks and indices swung between zones ahead of settlement. After rallying to a high of 16,525 in morning trades, concerns on higher food inflation and expiry pressure saw the Sensex tumble into red to a low of 16,182. The Sensex finally ended with a marginal (17 points) gain at 16,307.
In the process, the index not only broke its six-day losing streak, but has also taken support at the weekly S3 level, which is placed at 16,175. One can expect the index to find support around these levels today as well, unless there is any major negative news flow from the RBI front.
The Reserve Bank of India will be announcing its quarterly review of the monetary policy. A hike in CRR coupled with repo rates may spell trouble for the markets. However, any positive surprise should trigger a broad-based rally in the markets.
Daily support and resistance levels for the Sensex are as follows: The Sensex is likely to find support around 16,180-16,135-16,095, while face resistance around 16,440-16,480-16,520. At the lower end, the key support remains at 15,340 which is the 200-day DMA, while on the higher side the index on clearing 16,615, and may rally all the way to 16,860.
The Nifty moved in a range of 105 points, from a high of 4,930, the index dropped to a low of 4,825, and finally settled with a gain of 14 points at 4,867. The Nifty seems to have taken temporary support at 4,825, which is significantly higher than the long-term support of 4,600. On the higher side, the index may face resistance around 4,910-4,930-4,960, above which the index is likely to spurt up to 5,035.
For more on stocks visit smartinvestor.in: Tech view: Outlook seems tentatively bullish
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