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Stuck in short range

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STUCK IN SHORT RANGE

There was some upward move seen last week but, such optimism was tempered when it came under renewed selling pressure on Monday. Globally markets were down owing to continued European concerns. While day-to-day fluctuations are reducing investor risk appetite it would be difficult to see the trend change soon. We have been advocating bearish view after the close of Friday and advised traders can short with stop loss of 5300. A sharp decline was seen in momentum stocks like Lovable, Dish TV , Delta corp and VIP inds which is indicating that bulls are also acknowledging the weakness. Markets are currently stuck in a small range and for Nifty future 5100 and 5300 can be considered as short range and between these range bias remains negative. If Nifty manages to break out from this range there could be a very sharp move on either side for minimum 3% to 4%. Based on short term charts averages 5100 will act as strong support and if indices sustain below 17000 and 5100 there could be sharp decline in subsequent days. A renewed buying interest can be expected only once these global concerns trim down otherwise market are likely to become lackluster in coming weeks.

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Written by Rakesh Gandhi

November 15, 2011 at 1:32 pm

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