The markets opened today on a flater note indicating the ongoing struggle between the bulls and bear to give the direction to the markets ahead of the Inflation numbers for April which came in today.
The inflation numbers which came in above expectation at 7.63% gave the blow for the markets driving the indices all the way down to 4876 levels way below the support level of 4882 which the target for the FLAG breakdown.
However the downtrend did not sustain for long inspite of the negative news and weak European markets which were broadly negative, and the recovery though not quick was quite decent to the extent of retracing all the losses sustained to nearby yesterday closing price indicating that the bears could be losing steam due to the huge discount created in the Futures. Also the technical snag in the NSE due to which the Nifty futures price was not reflecting added to the confusion helping the indices to recover to some extent.
Now that the Indices have fallen badly much below the target zone and most of the Indicators pointing out at Oversold zones it remains to be seen whether some positive momentum would set in to 4960-5000 levels or further dip to 4800 levels below which the downward trend would be clearly 4600 the numbers witnessed during December.
All said and done the markets have there own perception and way which could signal further course of action accordingly.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)