Nifty may test 6050, traders may place a stop loss of 5960 - GEPL Capital

The last day of first week of the year ended on a mildly positive note on the back of continued optimism of a rebound in the economy and policy reforms. India's Services PMI came in at 55.6 in December, 2012 from 52.1 in November, 2012. The market, which was trading in the red almost throughout today's session showed a late up-move to end the day up 0.11%. BSE OIL & GAS was the biggest gainer at 1% whereas BSE METAL slipped by the same magnitude.

Among the Asian indices, SHANGHAI COMPOSITE and NIKKEI were positive. Chinese stocks are now at their highest valuation in 13 months and could be set for a correction if global sentiment weakens. The market was led up by an improvement in the Services PMI Index. NIKKEI rallied by a massive 2.82% as it opened after the New Year Break and reacted to the US fiscal cliff. HANG SENG closed 0.29% in the red after cautious commentary by the Fed. European markets opened in the red due to nervousness surrounding the possibility that the Fed may cut stimulus. FTSE opened down 0.09%, CAC down 0.48% and DAX down 0.22%.

Technical Wrap

Nifty opened flat but it dipped in the red as the session progressed. It finally ended with a gain of mere 7 points at 6016. We continue to maintain an upside target of 6030 to 6050 range over the course of next few days. Now the level of 5960 would serve as a support for Nifty for short term. As long as Nifty sustains above 5960 the bullishness would remain intact.

In an alternate scenario a breach of 5960 may drag the Nifty down till 5924 to 5900 range. The level of 5823 has now emerged as a make or break level for Nifty on positional basis.

Source : Equity Bulls

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