Short positions may be held on to with a stop loss of 5850 - GEPL Capital

Indian markets continued their upward journey with NIFTY surpassing 5,800 mark during the day and SENSEX staying comfortably above 19,000. The SENSEX which was at a high of 19,322 on 28th Feb fell 562 points to a low of 18,760 on 4th March post Budget and regained 533 points at today's high point of 19,293. In all, SENSEX has journeyed almost 1,100 points through the past 5 days but has gone nowhere as a whole with a gain of 0.56% over the same period. Among the broader indices, BSE REALTY gained a whopping 4.52% due to positive news in the sector coming in from DLF (OFS), Godrej Properties (Jet deal) and also due to bottom fishing. BSE FMCG went out of favor losing -1.05%. BSE MIDCAP and BSE SMALLCAP gained 1.14% and 1.40% respectively.

Global sentiment was positive after DOW JONES hit a record high last night. Even FTSE which is at a 5 year high continued with its upwards journey gaining 0.36%. There is renewed optimism in global markets although nothing much has changed fundamentally. This makes the situation more dangerous since investors rely on a false sense of optimism that everything is or would be fine. Among Asian indices, SHANGHAI COMPOSITE and HANG SENG closed with gains of little less than 1% due to announcements made by the Government pertaining to higher fiscal spending targets. NIKKEI gained 2.13%.

Nifty added on to its gains of yesterday and concluded with a gain of 34 points at 5818. It is now very close to the resistance level of 5850 and our recommended stop loss is also the same. We maintain a bearish view for Nifty and a downside target of 5600 with a stop loss of 5800. There is also a miniscule possibility that it may correct till 5750 and may find support near that level.

In such a scenario we will abandon our bearish view; however our primary view remains that of a correction till 5600.

Source : Equity Bulls

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