The readers of this blog might have noticed how accurate we were yesterday in predicting a negative breakout, and what a negative breakout it indeed was as the benchmark index breached the key rock support of 5558 and went down south till 5521 before closing at 5542. (click here to see our previous post)
As 5558 was a critical support, it will be confirmed if the breach was false or true only if Nifty closes below 5558 for a day or two.
However, our outlook continues to be weak and in all probability we have entered a short term bear market. The only hope for bulls, if any, will be only if the Nifty somehow manages to close above the resistance of 5699.
As of today, the immediate resistance for the index is at 5576 which if conquered may see it go up to 5630.
On the flip side, the market will find support at 5529 and 5487 as it will weaken towards the next key support of 5444.
The short-term traders may continue to play on the short side by buying put options and shorting Nifty future and may further add to their short positions on every rise rise.
The mid-term investors may utilize the weakness to add HDFC Bank at 591.55 , HCL Tech at 922.70, ITC at 318.90 and TCS at 1845.15 in small quantities.
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