Market Scenario

Yesterday, the markets opened on a weak note. However, soon thereafter, the markets recovered. Taking cues from European markets, both benchmark indices made substantial gains with capital goods, metal and IT being the lead gainers.

Healthcare, banking, infrastructure and fertilizer stocks, too, supported the indices well. The market breadth was positive with advances at 767 against declines of 647 on the NSE.

The top Nifty gainers were L&T, Sesa Goa, Cairn India and Sun Pharma while the biggest losers included NTPC, Maruti, IDFC and ITC.

The markets showed positive trend after several days of downward swing. According to market men, the uptrend is on account of short covering. Hence, market men are cautious about the upward movement of the stock markets.

Technical Analysis: The Sensex closed at 16328, up 112 points from its previous close, and the Nifty closed at 4943, up 35 points. On the higher side 5000 and 5050 is the strongest resistance level while on the lower side 4920 and 4900 is the support levels. The markets are likely to be range bound. Markets are likely to experience short sales at higher levels.

Suggested Strategy: Since, this is a trending market with a downward bias, short selling could be resorted only at higher levels. Market movements may be watched and positions taken depending on the direction of the markets.