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On the back of negative cues from the international markets, the Nifty futures opened lower at 5392 on Tuesday. It sold off further and broke the two day old support at 5390 to  test the support at the 5350 levels. Please note that charts on this blog had been showing this important one and a half month  old support for the past month or so. The Nifty futures recovered in a late rally from a low of 5356 to reach the day’s high of 5414 at the closing time. The futures finally closed at 5399 with a loss of 30 points. Even though the markets closed after recovering some of the losses, the futures failed to reach the previous day’s closing / last traded price by a wide margin. These kinds of subtle gaps have been pointed out in this blog in earlier posts too as signals of trend change. But Tuesday’s subtle gap does not seem to imply much from the preliminary observation. If the international markets are providing positive cues on Wednesday, the futures may even fill the subtle gap and test the resistance zone at the 5450 – 5465 levels. The trading range for Wednesday may remain between 5350 to 5465. As seen and being pointed out on his blog  in the recent past, if the market fails in the test of an important resistance, it may test the support and vice versa. As such traders can expect two way trade in the new range between 5350 and 5465 for some time barring a covering rally above the 5465 levels.

Looking at the daily reports and Charts Nifty has tested the support of 5,400 and 5,380 but owing to good recovery in the final moments it closed above the 5,400 level, which is a positive indication for our market. For the day, Nifty has registered its PCR level at 1.10 against 1.13 as of last trading session. Because of selling in indices heavyweights, Nifty failed to cross the 9 & 14 day`s SMA placed at 5,476 & 5,462 but managed to close above 50 and 100 day`s SMA placed at 5,395 and 5,267; these levels may act as new supports, in coming sessions. For the market tomorrow it is expected that some more consolidation and ranged movement in coming days.

On Monday, the first day of the current trading week, the Nifty futures opened higher with a bang on the back of the late Friday’s rally in the Wall street. As expected, the futures tested the first level of resistance at the 5460 level. The futures  traded above the 5460 level for a very short time at the opening. However, it could not sustain the gains and the correction set in right away. After hovering flat for some time below the 5445 levels it hit a low of 5391 by 2.30 PM, which was even below the previous day’s lows. However, as the Nifty and Sensex did not break below the previous lows, the futures too recovered trapping the sellers who sold below the previous day’s lows. The news about the retention of 0 %  long term capital gains tax status of equities in the new direct taxes code also helped the relief cum covering rally in the last hour of trading. The Nifty futures closed at 5429 with a premium of  12 points above the Nifty index.