The 'Fort of 5200' was successfully defended amidst weakness in the global markets. And as soon as global markets gave a reversal signal, bulls went for the kill and have managed a 'text book' breakout.
Classical TA theory gives targets of 5640 and even 5880 on the Nifty. The word 'distribution' was used a hundred times on various channels over the past week. Was it distribution at higher levels or accumulation at lower (5225 - 5250) levels? As of now, it seems the latter is true.
- Why would a leading stock which is coming out with results on the 13th hit all time highs (Infosys)?
- Why would the Nifty Midcap and Nifty Junior cross the previous highs?
- Why would the Open Interest of 5200 and 5300 puts keep rising?
- Why would the favourite whipping boys Oil & gas and Telecom make ferocious strides in the last 2 weeks?
I always maintain - any charts can have 'n' number of bullish arguments and an equal number of bearish arguments. However, I really cannot find any bearish arguments for the Nifty right now, except for the fact that recent highs 5366.75 and 5399.65 have not yet been crossed.
I feel it is a matter of time now, and since there are many who still have a bearish view, a cross of these levels can bring in huge short covering. Those who bought on dips to 5220 - 5250 last week, have already got a cushion of 100 points and trailing the stop loss is easy now. For those who might have missed the bus, a tighter stop loss can be 5290 on Nifty futures to make a fresh entry.
