Sharp U-turn

Falling from 4940 in yesterday’s trade and closing in red
was quite convincing that Nifty has started its next leg
down. However in today’s trade the index made a sharp
turnaround and swifly surfassed 4940-4970, which was
our reversal level. So, now, Nifty is trading above 61.8%
of the fall from 5182 to 4538, which signals that it can
retrace more from here till 78.6% or even the whole move.
So, in short term, we revise our bias to buy with a target
of 5150 and a reversal down below 4850. We maintain
our medium term bias down with a reversal above 5180
only.
On the daily chart, Nifty is trading below its 20 daily
moving average (DMA) and 40 DMA at 4920 and 4943
respectively, which are now supports in the near term.
The momentum indicator (KST) has given positive
crossover and is trading below the zero line. The market
breadth was positive with 901 advances and 383 declines
on the NSE and 1,781 advances and 1,105 declines on the
BSE.
On the hourly chart, Nifty is trading above its 20 hourly
moving average (HMA) and 40HMA at 4892 and 4791
respectively, which are now supports in the short term.
The momentum indicator (KST) has given positive
crossover and is trading above the zero line.
Nifty and the Sensex gained 122 and 409 points
respectively. Of the 30 stocks of the Sensex, Reliance
Energy (up 5.31%) and Infosys Technologies (up 4.08%)
and TISCO (up 4.28%) were the top performers.