The downtrend of last week continues and Nifty breaks important supports of 5860-5820 to test 5740 levels today. VWAP @ close is 5834. Nifty closes @ 5763.
1) Bearish views continue for tomorrow too. Below 5740, Nifty could test 5700-5650-5555 levels.
2) A gap up opening above 5800 and sustaining above 5830 can bring about a reversal driven by short covering rally up to 5865-5920-5965 levels. This scenario is unlikely, however.
3) The 52-week chart shows Nifty is trading below the important levels of 5946 and just above 5700 levels in the past two sessions and closing at the lower end. The level of 5700 remains the last level of hope in the short term for Nifty as a point of recovery/reversal. The results season will gather momentum with the QE-3 result of Infy in a couple of days. Good results by the IT major could lead to a reversal of the entire index. At the moment it is short on rise market with reversal above 5845 on closing basis. A couple of sessions still to go before a clear cut reversal could be concluded. Happy trading!
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