Update for 3rd May 2011

  Market Awaits the RBI Action for Directions

• Nifty futures lost some 30 points on Monday but just kept itself above the previous swing low of 5700.
• The contract has recorded losses for the past six trading days, and therefore, is ripe for a short covering rally.
• However, any such market action would certainly be dependent on the outcome of RBI interest rate action. If the RBI limits the rate hike to just to 25 basis points ( repo and reverse repo rates ), a relief rally can be expected.
• Such a relief rally may still encounter resistance at around the Monday's high of 5790. 
• Monday's trading has not yet significantly changed the technical position of the market. For a detailed analysis of various market scenarios, please read the previous post which described the various market scenarios. 

    Nifty Futures - Intra-day Chart

   Nifty Futures  - Daily Chart 

Update for 2nd May 2011

 Nifty Futures Critically Poised Again

• Nifty ended up with losses on all five days of the previous week and finally closed at the lower end of the present trading range. However, trading was still confined to the month old narrow trading range of 5750 to 5950.
• Some four weeks back we had opined  that some sideways trading  or a consolidation was the preferred short term view. Since then, Nifty futures kept itself mostly inside the narrow trading range.
• It is still impossible to take a view about the break out direction from the arrow trading  range. Moreover, as the market has made losses in succession for five days some positive closing or short covering may be imminent. As such, traders may look for partial booking of profits or hedging of short positions at the lower end of the narrow trading range at the 5700 - 5750 range. 

   Nifty Futures - Intra-day Chart

   Nifty Futures  - Daily Chart