Bottom Continues To Elude Markets

Markets shed all its intraday gains towards the close. Mr. A. Raja’s arrest by CBI triggered the change in sentiments as Nifty suddenly shed about 50 points in a matter of 15-20 minutes. But, whatever the reason, fact is that Nifty is unable to sustain higher levels and this is in a backdrop of persistent positive global cues. There were a number of stocks that did find buying support at lower levels, be it on short covering or value buying. But, there were more stocks that weighed heavily on the indices. Hero Honda reacted negatively to its numbers and was the biggest drag on indices. Other index losers were NTPC, Bhel, Bajaj Auto and HDFC. Nifty failed to move past 5500 and closed almost unchanged at 5430.  Despite, the late sell-off we continue to be of the view that Nifty is unlikely to sustain below 5400 and this level is likely to provide a strong support even if a temporary one. On an intra-day basis we might slip to around 5350 but closing is unlikely below 5380-5400. RIL is witnessing strong volumes around Rs 900 and a move above 930 could take it to around Rs 965-970. Volatility is likely to be on higher side as market tries to find a bottom.

Nifty has immediate support around 5380 and then around 5350 while resistance is likely around 5485-90 and then around 5550-60.