HDFC Sec: Stay on sidelines

HDFC Securities in its daily report said that, what transpired in yesterday's session puts our bearish count under serious trouble, as the market did not do what was expected after a gap down open yesterday.

Such resilience is a serious clue to be ignored and with Reliance Industries breaking out of a cup and handle formation with sizzling volumes imparts further weakness to our bearish count.

We would need a strong down day and a break below 11300 to consider bearish possibilities, till then we would ride with the direction of the trend.

Reading this may raise a few eyebrows but at the end of the day we have missed a 5% Sensex move since we turned bearish and what happened in yesterday's trading session receives a follow through in the days to come by making the Sensex close above 11630, then the upsides would be good enough to forget the pain of the past few weeks.

So we keep our fingers crossed to allow the market give us a follow through. The bearish count is not being abandoned completely and that would be done only if the Nifty gets past the 3520 (11900) mark on a closing basis.

But for the moment we would stay on the sidelines and be biased
towards upsides to the 11900 levels.

The trend remains up till 11300 is broken. On the upside 11630 will be a strong resistance a move past this mark will open up upsides to 11900 levels.