Major Resistance for Nifty at 6042 - Alex Mathews

The markets had opened on a positive note tracking global markets and moved with a positive bias with major buying interest coming in the second part of the day which took the markets above the 6000 mark at one point in time to close near to the day's high. Short covering ahead of the futures and option November expiry also lifted the sentiment.

The Asian markets were up in the morning on the back of optimism over an agreement to rescue Ireland's banks which may reduce distress across European debt markets. BSE Bankex, Consumer durables and IT index gained 2.64%, 2.59% 2.5% respectively.

In the European front also the markets were up on Irish rescue with banks and miners riding the bulls. In the US, the index futures were trading with good gains even though news was there that the US will fail to strengthen in 2011 as companies slowing their hiring activity.

The last week slide could be contributed to the selling by funds based in US and Europe which follow calendar year as the accounting year. So for Nifty the major resistance is there at 6042 and only if Nifty closes above this level, we may see further upside or in fact a turn around so to say. If Nifty fails to stay above 6000 then we can expect more selling which can pull down the Nifty towards 5900 levels in the short term. The year end selling by funds will put pressure on the markets at higher levels. Also one more thing to keep in mind is that Reliance Industries is trading below its 200 DMA of 1035 and this weakness can lead the market down.

Source : Equity Bulls

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