Well the 'V' shaped recovery of indian stock markets after touching lows on 03.11.2009, at hightened volatility, was surprising to many analysts, who were looking at deeper correction to levels of 4200 and so on, in the down move started on 17.10.2009. But the markets have their own mind and always defy logic and especially consensus opinion, in whichever direction it builds up. The volatility index hovering around 29 and Nifty's attempt to close above 5000 last week, suggests that the retracement is almost completed. I felt that Nifty will in a band of 4500 to 5000 during this month, proved to be on dot so far. Currently both the indices have retraced 70% of the fall and might move upwards upto 80% retracement levels during this week. Nifty level to watch shall be 5054 and Sensex it will be 17061, from where down move should start once again, or sideways movement of consolidation will last till next trigger emerges during December in the form of 'Advance Tax Numbers' and the outlook on economy, especially on Agriculture front.
Watch the level of 5054 for clues and exiting long positions around this level is not a bad idea. One may look at buying a straddle of 5000 Nifty for quick returns, capturing the volatility.
Range for the Day: 4920 - 4950 - 5020 - 5050.
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