It was a volatile opening to the week as Nifty fluctuated in and out of positive territory. After a positive open to the trade Nifty suddenly lost significant ground as Nifty slipped below 5800. Positive open at European markets not only help recover ground but also to move up sharply in the positive zone. Finally, Nifty closed above 5900 up almost 50 points. Recovery was led by RIL as stock moved to around 3 weeks high at 1046. Banking looked weak for most part of the session but recovered significant ground towards last one hour. Capital goods were also in demand as stocks like Bhel, Siemens and later L&T found buying at lower levels. Some of the prominent gainers were SKumars, KS Oil, Hexaware, JSW Steel, Pantaloon, IRB, Ruchi Soya, IBReal, Jindal Holding, Petronet, APIL and Welcorp. Cement turned a bit weak after sharp Friday surge while some other stocks to lose ground were Uniphos, ALL, ITC, Rolta, M&M and HPCL.
Nifty sustained above 5800 and later found enough muscle to move past 5900. Last week Nifty made a panic low at 5720 that was higher then the previous panic low of 5690. The late surge took Nifty past 5880-90 that was looking like a significant resistance. Broadly, sustained trades above 5930-40 would suggest that we have formed a decent bottom at around 5700. Nifty is likely to challenge the recent swing high of around 6070 if the resistance at 5930-40 is successfully negotiated. RIL seems to be taking the lead while the leaders of the previous rally banking and Autos are either correcting or consolidating. Bhel, APIL, Siemens and L&T are also showing positive bias and it suggests that Capital Goods could also take the lead whenever the next upmove begins. Tata Steel and Bharti are the other two heavyweights that are likely to lend support to any upmove. The above mentioned names are the ones that could be accumulated on bad days for decent returns over next 4-6 weeks. The battered mid caps are also showing early signs of recovery but short term trades should be avoided in mid caps and only good quality mid caps be accumulated with 3-6 months investment horizon in mind.
Nifty has support around 5825-35 and significant one around 5740-50 while fresh momentum is likely above 5940.
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