The range of 5970 to 6040 would continue to serve as a resistance for the Nifty

Gloomier data got added to the existing gloom. This time it was the PMI number that disappointed. HSBC Services PMI number came in 44.6 in September, 2013; the lowest since March, 2009 versus 47.6 in August, 2013. The HSBC Composite PMI index was at 46.1 in September, 2013 versus 47.6 in August, 2013. Concerns surrounding US shutdown continued to worry investors. Hence, the rise in the market met with strong selling pressure and markets ended the day flat. The only silver lining is the expectation in the market that shutdown will ensure that monetary stimulus will continue. Among the broader indices, BSE POWER (-0.49%) and BSE CAPITAL GOODS (-0.49%) were the major losers while BSE REALTY (+1.65%) and BSE AUTO (+0.94%) were the best performers. NIFTY closed yesterday with minor loss of 0.04% while SENSEX ended the day with minor gains of 0.07%.

Among Asian indices, SHANGHAI COMPOSITE was closed today, HANG SENG lost 0.33% while NIKKEI lost 0.94%. There were fears in global market that US political impasse could lead to Government defaulting on its debt. On the other hand, Bank of Japan refused to increase quantum of its monetary stimulus as Japanese PM felt confident that the economy was better off now. European markets remained surprisingly steady despite US shutdown fears.

Nifty ended the day almost flat at 5907. The level of 5970 is the immediate resistance for Nifty, As long as it trades below this resistance there are chances of a decline till 5850 to 5800 range. On the down side the level of 5800 has now emerged as a key support for Nifty. A breach of 5800 would be a bearish indication which would imply a possibility of a further decline till 5600 and lower. Now the critical resistance is placed at 5970. On the higher side only a move beyond 5970 would confirm further bullishness till 6040 which is the next resistance.

Source : Equity Bulls

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