The Indian Indices had a volatile session on Monday where the range bound momentum of the Indices continued for the third day in a row. Infact now the range bound momentum is getting narrower and narrower with each passing trading session.
The charts are indicating that the markets are in a state of oversold zone and hence the range bound momentum, since the correction from the 6111 levels has been very rapid and fast, due to which the Indices though had very high chances of further correction below the 5860 support level to the 5600 level is stuck.
The volatile sessions ahead of the Budget session on the background of the RBI Governor Subbarao announcing today in Moscow that there is little room for further rate cuts, and transferring the burden of the triggering the Growth story to the FM has made the indices to stay in the limelight with range bound momentums since there is no clear direction of the FMs direction for the Budget ahead of the Election year.
The charts are indicating clearly now that the markets could stage some bounce back rally if the 5930-60 hurdle is taken off back to the 6040 levels however the Banknifty is the hurdle to watch out for since the charts of Banknifty seem not to be supportive of the Nifty at current levels which is consistently failing to crossover the 12430 levels in Futures yet again today.
If the Banknifty is supportive then any crossover of the 5960 mark would lead the Nifty to reach the target level of 6040 ahed of the budget and if the support level of the 5860 is broken then Nifty could easily slide to the 5750 levels by the Budget……
(Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)