It was the amazing week for the market as it gained almost 3.5% during the week and has formed bar reversal pattern after hitting an important barrier, which was at 5665. Volumes on the last day of the previous expiry were remarkable at
5671 levels and it was close to 38.2% retracement of the entire rise between 4770 and 6110 that was at 5600. Due to
quick and extended sell off we are of the view that the market is in strong pull back mode and might arrest between 5970/
6030, which was an equilibrium level for the market in the month of January (where the market has spent maximum
time). If it succeeds in crossing and sustaining above 6030 levels for next few days then only the market will cross 6110
mark that will result into hefty short covering and might even re-challenge previous high 6338.
If nifty fails between 5970 and 6030 then one more dip towards 5850/5810 is not ruled out. However, an important aspect
to keep in mind is that if it continuously fails at 6000 levels and forms reversal pattern then it will be a completion of the
pull back and might start one more down move that could be more serious.
In brief, between 5970 and 6030 traders have to be cautious at least for adding long positions as the rally is mainly driven
by Technology stocks and supported by strong global cues. One can reduce weak long positions around here and can look
for selling short if it reverses sharply or forms reversal pattern on daily charts. With a tight stop loss at 6035 on the higher
side. If it sustains above 6035 then one can look for select buying with a medium term view.
Intraday Strategy: Buy 50% around 5900 and balance 50% around 5890 with a stop loss at 5875, target 5950 and 5965.
Sell 50% around 5970 with a stop loss at 5991. Targets are 5930/5905.
Bank Nifty: Sell at 12240 and at 12280 with a stop loss at 12310 for the target 12170/12100. Buying is advisable only
around 12090/12030 with a stop loss at 11980.
