Nothing big bang was there in the Union Budget but it was a big bang day at the bourses as indices gained over 3%. The session began on a marginally positive note but momentum gathered as the day progressed. Auto and financial stocks led the rally as was mentioned in the previous newsletter but the velocity of the up move as witnessed in stocks as well as indices was totally unexpected. The monthly sales figures released by Auto manufacturers further fuelled the momentum. The biggest gains were seen in TVS Motors, Ashok Leyland, M&M, Maruti and Escorts. Bank Nifty zoomed higher by more than 4% on across the board buying in banking stocks. Short covering too aided the up move. Nifty finished the day at 5530 almost at the high point of the day. Nifty has moved up sharply and is now placed just below the strong and crucial resistance zone of 5545 to 5575. This single day up move of around 200 points has raised hopes for a positive bias over short to medium term. This is not to suggest that it would be a straight upmove without any corrections/consolidations. In fact, we could see some consolidation just around the current levels before making another attempt at taking out 5600. The global cues could trigger some kind of correction. Technically, the levels to watch for on the downside are 5440 and then 5370-5380. We could retrace back to the second level but this level should provide strong support for the upward bias to persist. So, practically as a trader one should use declines towards 5440 and 5375 to take bullish positions in Nifty as well as stocks. Bullish pattern is seen in LIC Hsg and sustained moves above 202 could trigger strong up move. As mentioned in previous newsletter some banking and auto stocks are also looking positive and one can accumulate these stocks on decline.
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