Nov 22 2011 Market Today

Nov 22^nd is the first day in the last ten days where we haven’t seen a new low. That itself looks like a big achievement. Market took a breather from the relentless selling. This pause in down trend came even though US markets close down by 2.5% on Nov 21^st. Also, yesterday market’s intraday low was 5764.

	NIFTY
Date	OPEN	HIGH	LOW	CLOSE
21-Nov	4873	4873	4764.8	4778
22-Nov	4794	4854	4782	4812

 When market touched intraday high of 4854 yesterday, it looked as if market is ready for the sharp (V-shaped) reversal. But market couldn’t sustain the momentum. However, market may still go up in the near term for following reasons.

·         Short covering. This week being the expiry week, bears who are sitting on profit would start booking the profit which could lead to short covering rally.

·         Oversold conditions. Oscillators such as stochastics are in the oversold zone.

·         Market is close to the previous support level of 4700 -4750. This level got tested four times in the last 12 months. So, it can be considered as a strong support zone. So, we can hope market will defend this support zone.

How do we know market is headed in the upward direction?

First, market should see a higher high – it should go above 4873 during intraday trade and stay above 4782. Then we can consider that it started upward trajectory. If the market goes below last two days low of 4764, then we can conclude that the short term trend will continue for few more days. However, the key level to watch out for is 4700. If NIFTY breaches 4700 then run for the cover.