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Nifty

After consecutive narrow ranged bodies near the ‘Channel resistance zone’ the Nifty closed below its 5 DEMA level of 16085asthesupply pressure mounted in the second half of the day. A close below the crucial 16040 level would reconfirmthe loss inbullishmomentum as the index may even slip below its 20 DEMA zone of 15950 immediately. Technically both the trend strengthindicatorsremain neutral without any significant signs of reversal. Derivative data for indicates immediate support at 16000 followedbynextsignificant bound at 15700, which also coincides with the on-going channel pattern base. Hence only a breakout above 16240fromhereon could reinstate the bullish momentum which could see a move towards 16400 to 16550 (200 DEMA zone) else expect weaknessto range bound action for the rest of the week. With the result season progressing well, stock & sector rotation is expectedtoremainrobust which has already triggered a cautious zone above 16135. Only a breakdown below 15740 from hereon would indicateasevereweak trend & hence serves as an ideal stoploss for ongoing directional upmove while momentum based longs should be squaredoffincase the 16040 level is breached during the day.

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