Nifty In Consolidation Mode

It was a choppy day for the markets as Nifty see-sawed between 5470 and 5570. Nifty opened on a weak note and traded with negative bias in the morning session. But, sentiments recovered and turned for the better on news that Col. Gaddafi has accepted peace moves. Nifty recovered more than 100 points from the day’s lows. But, expectedly selling came in at above 5550 levels as Nifty closed at 5536. Overall, it was a satisfactory day considering the fact that we had gained around 200 points on Tuesday. DCHL was the biggest gainer amongst the derivatives counters as it gained over 14% on huge volumes. Other significant gainers were Sobha, Triveni, Orbit, Renuka, Karnataka Bank, KFA, Godrej Ind, Indian bank, JP Associates, Tata Power, Bhel, L&T and Apollo Tyres.  On the losers’ list were S.Kumar’s, Welcorp, IDFC, Sun Pharma, LITL, Hotel Leela, Adani Power, Aurobindo, Reliance Infra and Jain Irrigation.

Nifty managed to sustain and close above 5500. Markets are showing strength and a close above 5550 would be very positive for the short to medium term trend. It may take some time and Nifty might consolidate between 5400 and 5600 for 3-5 days. But, broadly the trend has turned positive and any declines should be used to accumulate positively biased counters. Sustained trades above 5600 could trigger another wave of short covering and that might benefit the badly mauled counters like IVRCL Infra, DLF, JP Associates, LITL and the likes. As of now the large caps HDFC, HDFC Bank, L&T, SBI, Bhel and Bajaj Auto are looking good and should be accumulated for decent trading gains over next 2-4 weeks. JSW Steel has given a breakout above 940 and is likely to target Rs 1025-1040 in next few sessions. Similarly Bajaj Auto has broken out from an inverted head & shoulders pattern and is looking bullish. Some others that are looking bullish are Godrej Ind( above 177), Apollo Tyres, IOB( above 140), Havells, LIC Hsg( above 202), Wipro( above 448), Kotak and IRB( above 195).

Nifty has immediate support around 5445-60 and then around 5375-5400 while resistance should be seen between 5570-5610.