Nifty danced to the tune of Global markets and closed with a decline of 127 points at 5967 levels. Technically both short and medium term trends are down but long term trend is clearly up.
On Long term charts 5850 appears as a decent support which is also the 50% retracement level of current up move, hence importance of this support level increases.
Yesterday I have said that Thursday is going to be the crucial trading day for bulls because as per time series forecast study current ongoing correction should end on Thursday i.e. Thursday should be the last down move day and thereafter from Friday onwards lows made by Thursday should not be cracked again. I am an optimistic person, hence even after Thursdayís decline on huge volumes I would suggest for keeping a close eye on lows made on Thursday i.e. 5955 levels. To maintain a small margin of safety, I would suggest for keeping an eye on 5950 levels instead of 5955.
I would like to highlight that
  • Technically bullish picture is still intact.
  • Technically, I am not scared.

But three apprehensions are making me scary about markets-
1. Continuing weakness in rupee which I believe is due to widening Current account deficit. Although as of now no technical indication is suggesting for rupee weakening to 62 levels which most market voices are expressing.
2. Press conference by Honíble Finance Minister when Nifty is down around 100 points and that too in line with Global markets. I fail to understand why Honíble Finance Minister is doing press conference and saying that market has wrongly interpreted the Fed statement. He also said that government would take steps to boost FIIís confidence here. But my dear friendís itís not only Indian markets, entire Global markets has participated in the declined and after all these are financial markets which moves in a zigzag manner. In my personnel opinion Honíble Finance Minister should abstain from panicking like a day trader in any 100 point decline on Nifty.
3. Upside breakout in VIX has been witnessed on Thursday. This suggests that Bulls might be trapped on the wrong side of the market and more down side is likely at least in short term.

I would like to bring to your kind attention that I have recommended Selling Punj Lloyd, NHPC and Petronet LNG. I have also recommended subscribing to Offer for sale of Oracle Financial Services. On Thursday Oracle Financial Services closed at 2661 levels i.e. 16% up from the offer price and that to in one day. Also downside target of Punj Lloyd has been met and both NHPC and Petronet LNG are running 50 paisa short from the downside target levels.
I would suggest selling Hexaware Future with stop loss above 79.70 levels for a target price of 71

Warm Regards
Rakesh Bansal
Vice President
R K Global