Topping 5182 key to Nifty uptrend

Last week witnessed a lower turnover as the bulls attempted to push markets higher without success. The 5182 top remained inviolate and a near term resistance.

The market internals were marginally positive as the combined exchange market breadth for the week stood at 10643 : 9875. The capitalisation of the same on a commensurate basis was negative as the figures were Rs 45,166 crore : Rs 50,631 crore.

The NSE gained Rs 19,779 crore in market capitalisation during the week. The rally was led by the technology stocks, even as the banking and mid-cap stocks lagged behind.

Overseas investors pumped in Rs 694.30 crore during the first three days that data was available. That resulted in the rupee closing at 46.53 vis-a-vis the US dollar (against the previous week’s 46.27 levels).

The Dow Jones Industrial Average closed at its highest weekly close of calendar 2009, though the calendar highs remained unsurpassed. The FTSE declined and underperformed the US indices as did the Hong Kong Hang Seng Index. The Singapore STI and the Tokyo Nikkei 225 indices gained week-on-week as the bulls showed a reluctance to buy with the conviction needed for a secular and strong upmove.

Technically, the domestic markets have fought shy of breaking out past the 5182 highs, which is the Gann swing reversal inflection point. Unless the Nifty 50 closes above this hurdle with high volumes and open interest expansion on the longs, a sustained uptrend may be elusive.

The weekly range advocated last week between the 5260 and 4960 levels has held as the Nifty gyrated within these parameters. This week is likely to witness a range of 5200 on the high side, above which the 5265 level may be seen. Support will be seen at the 5025, below which the 4975 could be tested.

The bullish pivot for the week will be at the 5135 above which the Nifty must stay to remain bullish. The bearish pivot will be at the 5100 levels below which the bears may get aggressive.

As long as there is a divergence in the various sectoral indices, a strong upmove may prove to be elusive. The average ticket size per trade is also suggesting a feeble buying momentum. Buy on a confirmed breakout only.