Posted By : Kishore B.S
Yesterday the markets gave in to the bears completely where the Nifty slipped by a staggering 1.5% or nearly 70 points and below the pivotal support zone of the 5850 levels, which is infact the bottom line of the support zone.
Though the closing is just above the 5850 levels, or just at that border, technically the support for the Indices has been broken, and the markets have clearly indicated now that the medium trend has now changed to down, after the small bounce back which was quite strong being witnessed during the last week.
The charts were pointing out that the bounce could get stronger infact with new highs as the target, but the markets has decided otherwise and we are treading downwards from yesterday after the better than expected IIP numbers, which changed the market mood from bullish to bearish.
Todays inflation numbers that are likely to be announced might be the best indicator to watch for the clear direction as to the RBI policy scheduled for next week regarding the eventuality of any rate cut.
However the technical charts are indicating that any fall today below the 5830 would completely confirm the downtrend with target of the 5689 levels sooner or later and any move above the 5900 levels, would be the trendsetter for the bulls to rule supreme, with this points in mind, adequate directional positions should be initiated.
(Inputs: Basket option Research bureau – Bangalore)