“BUY NIFTY ABOVE 7455 TGT 7485/7545 SL
7410”
The
Sensex posted its biggest drop in three weeks and Nifty settled below its
crucial psychological level of 7,500 on the back of weak global cues. Investors
maintained a cautious approach ahead of the two-day meeting of the US Federal
Reserve’s Federal Open Market Committee that begins on Tuesday. Markets
came under selling pressure after the Bank of Japan refrained from introducing
new stimulus measures at its latest policy meeting. The Japanese central bank
issued a warning on inflation expectations and offered a more negative view of
the country’s economy. Investors now look forward to the Fed meeting, wherein
although it is largely expected to hold raising rates, its comments on economic
outlook and inflation would be closely watched.
The Sensex
after opening a shade higher, advanced to touch a high of 24840 at the outset
before profit- booking in recent gainers took hold, which pulled it down to a
low of 24517 and settled at 24551, showing a loss of 253 points. The gauge had
gained 180 points in the previous two sessions. The Nifty broke below the
crucial 7500 level and settled lower by 78 points at 7460. Intra-day, it
shuttled between 7545 and 7452. Taking cues from the Asian indices which are
trading in negative territory, declining around 0.6 %, the domestic benchmark
indices started the session on a negative note and remain in this territory.
The Nifty futures contract opens the session
at 7545. Recording an intra-day high at 7555 the contract fell sharply and
marked an intra-day low at 7493 levels. It currently tests a key support at 7500
levels. The near term outlook will remain bearish as long as the contract trades below 7,530 levels. Traders with a short-term perspective can make use of rallies to initiate short position with a stop-loss at 7555 levels. Also, a decisive fall below 7500 will indicate increase in selling pressure. Next supports are at 7460 and 7440 levels. On the other hand, significant resistance is at 7555. Only a decisive break through this resistance level will reinforce the bullish momentum and take the contract northwards to 7575 and 7620 levels.
STRATEGY: MAKE USE OF RALLIES TO INITIATE FRESH SHORTS
SUPPORTS: 7490, 7465
RESISTANCES: 7520, 7550
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