Nifty closes above resistance of 4840 - Alex Mathews

The markets had opened up registering good gains tracking Asian peers and thereafter showed a steady upmove with net gains registered every hour and finally came to a close for the day with around 3% gains. Support from the Asian, European as well as US futures were strong enough to keep the sentiment positive throughout the day. Buying was seen across the sectors as investors were waiting for the right time to take fresh long positions in the December expiry. Last Friday being a dull day on the global front, our markets had a not so good session which made investors to postpone their investment in the December F&O series which literally happened today causing huge rally Apart from that improvement in the EU outlook, sentiments were kept alive on the back of speculation that the European leaders will do more to restrict the spreading of debt crisis. Positives drove US futures as holiday weekend sales during thanksgiving climbed 16% to a record as shoppers flocked to stores earlier and spend more taking the average spending per shopper to $398.62 when compared to $365.34 a year earlier.

All sectors on BSE gained over 1% today setting the trend positive. IT shares were in demand as US futures gained considerably around 250 points at one point in time indicating a positive US opening. Metal stocks rallied on the back of strong gains made in the base metal price on LME especially copper. The retail sector stocks which had rallied on Friday after the cabinet approved FDI in the sector, lost ground today as the ruling government is facing stiff resistance from the opposition and a section of its coalition.

Nifty today closed above the resistance of 4840. Now it is looking at resistance of 4881 and 4918 levels while the support is there at 4792 and 4760 levels. The rally can be regarded as a dead cat bounce and to be called a reversal it has to close decisively above 4950 levels which is unlikely. Also we have to keep in mind that on Wednesday, we are going to see GDP numbers which is expected to be below 7% when compared to 7.7% previously. So investors should be cautious at higher levels.

Source : Equity Bulls

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