- Created: Thursday, 05 May 2016 18:15
Nifty Future is showing lack of downside momentum as market failed to move lower in its multiple attempt after breaking below the intraday low. After a sharp fall early this week this price pattern is encouraging for traders with bullish view. However, lack of momentum itself does not ensure trend reversal and thus price action itself needs to provide confirmation.For short term trend reversal the confirmation will comes only if market sustain above the level of 7800 mark. And a move above 8000 to consider that market resumes its medium term up trend.
Today's trading session Nifty bounced back from slightly above the level of 7700 mark, where we see a gap exists in daily chart during last month. A gap being the imbalance of demand and supply offer important clue regarding support and resistance. We expect the level around 7700 to play a pivotal role for the market direction going forward.
It seems that market is taking time to evaluate how valuation stands out during earning season. Earning so far, have been decent. One surprise move up is likely to come from banking stocks once the earning session will be completed as those being under stressed asset situation, is start showing resilience in its numbers. That could be the next trigger for the market along with the monsoon.
Stock specific we believe if market bounces off the support and starts a rally those stock showing significant strength by holding around its relative high, despite of recent market correction will outperform. One such stock is BATA India ltd, The stock in its daily chart is in strong uptrend. If it manages to move above the level of 575 the stock is likely to move till 600. Traders are advised to maintain a stop below 565 to control risk in adverse situation.