Weekly Update on 9th July 2012 NIFTY SPOT - (5317)

In our last weekly update we were anticipating a small pullback to 5200 - 5225 and then resume its upward momentum. NIFTY traded in a narrow corrective range of 70 points between 5333 - 5263 and closed the week @ 5317. In the current week NIFTY has resistance @ 5414 - 5450 - 5513 while support is @ 5260 - 5210 - 5160. In the current week NIFTY can move in 2 wavecounts :

WAVE COUNT 1 : PROBABILITY 30%

If on monday / tuesday if the NIFTY stays above 5260, and then moves above 5335, it can rally upto 5414 - 5450 - 5492.  In such a scenario, NIFTY can post an intermeditate high on a 3 day rally in the range of 5450 - 5492 on wednesday /thursday and  enter a corrective phase with a sharp fall on thursday/ friday. This fall can also be trigerred by an eventful day on thursday  with results from Infosys and TCS and also accompanied with the IIP data.

WAVE COUNT 2 : PROBABILITY 70%

However if 5260 is broken and if the NIFTY is unable to rise above 5335, it can then fall down to the earlier congestion zone  of 5150 - 5170, whereby it should get fresh support which can take it to higher levels of 5400 +.

TRADING STRATEGY :

Book profit on longs and stay in cash to buy @ lower levels near 5160.