Nifty poised hanging man but closed almost 5200

NF Daily Chart

Nifty poised a Hanging man on day before and as per Hanging Man NS was down 120 points day before but yesterday a sharp pull back proved wrong in Nifty. For tomorrow 5165 which is week's pivot has to be saved then NS can move past 5230+

Nifty may close below 5100 today

NF Daily Chart

Though RBI CRR cut of 50 bps has given a good rally to Nifty, which helped the index to cross over 5100 mark. RBI rate hike is to boost liquidity in terms of Rupee appreciation and also to boost banks for overnight borrowings. Everyday banks borrow money overnight from RBI @18% and that has come down to 16% which will give them more liquidity. But is the rate cut season has started? I do not think so as the fiscal deficit is churning up and it was predicted that it should be around 4.6% of GDP but it may go up to 6% GDP which is more pain for government. Unless Indian government takes some fiscal reforms and measures things are looking gloomy.
Now about Nifty, it may target 5070 for today's close as well as today is the expiry of F&O. Nifty is highly ovebought and investors/traders can short at this level upto 5150.


2-45 pm IST Update
Nifty testing the patience of traders who have shorted. As today is the expiry NS trying to close above 5150 to get the most rollovers.


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Nifty tested 5050 but that is enough

NF Daily chart by Google Finance

NS has moved past 5050, but I think this is enough from 4531 to 5050. As Anil said that ruppee is appreciating so the banks are gaining that is true But we do have RBI credit policy which is going to be held on 24th Jan. Though RBI may be dovish in terms of CRR cut but there is much liquidity in system. IIP data has given some boost so growth wise it is fine though IIP data is still not reliable. Expansions for the corporates are being stalled but inflation has come down below 7.5% MOM. Though RBI's stance for inflation would be below 6%. I do not think RBI will jump to cut rates atleast in January. NS sustaining below 4991 will wake up the bears and I am hoping expiry will be somewhere near 4885-4850 level.NS will face stiff resistance around 5030-5065-5080 level.

Nifty to resist @ 5011 level

Nifty Fut Daily Chart

NF is in highly overbought mode. Yesterday's consolidation after big rally has stalled NS to 4950 level. But as I said this rally is not convincing, it is the liquidity which is driving NS above 4986 level. I am full bearish at this level. Below 4985 short NS. Even NF is in discount now.

RIL is leading the front for NS for last 2 days where as CNX-IT stocks are lagging. But RIL has called for buyback of stocks which signifies down the line the earning will not be good for RIL. Tomorrow is RIL result and from tomorrow the bear show will start.

Nifty to test 5011 or before then it may go to 4906?

NF Daily Chart

Technicals of week is presently favouring this upmove. A keen tussle would emerge to retain 5000.

Support has risen to today's low-4905 with a gap & intraday supports @ 4935-45. 4986 is the immediate resistance above that NS may test 5011, but that level is almost 480 points up move from 4531. NS has to correct from there and it may go down to 4800 in this month or rather this down move will take 9-16 days. Due to expiry, option writers won't allow to come down more. May be after expiry the fall will start. This rise is not at all convincing. Strong Euro has pulled the European market as Spanish short term bond yields has come down and Spain could able to raise desired money. Overall situation is not favourable for sovereign bond holders. European debt has made S&P to downgrade the ratings. Obviously banks and other corporate institutions will not be ready to waive off the heavy debt made by countries.

For S&P(chart taken on 12-48 am IST) also 9-RSI is overbought state.

S&P Daily Chart at 12-50 am IST

TT Data has been updated.

Before Trading please see the Golden Rules and TT Data