Nifty outlook

The market seems to be inching upwards trading above the 5000 mark in 13 odd trading sessions for the first time. The rupee has been trading around the 50 mark gaining massively in a very short span of time adding to the cheer on dalal street. Reliance is considering a buy back and Food inflation is in the negative territory .On the Global front U.S economy is on the recovery mode and there has been muted responses from the Euro area. Is it time to change strategies on the Nifty and go Net long on the index does it make you feel there was never a better time to buy??. As a market player we all know there is always a day fro us in the market and there is never a beginning or end. The Nifty is currently trading above the 10,20, 50dma and is expected to face immediate resistances around the 5100 and 5200 mark. A immediate close above 5100 in the next 2 trading sessions could see and expiry around 5200 levels or at least testing of 5200 levels. However with markets being extremely overbought at current levels could mean a sell off at these levels to retest 4600. Buying of out of the money February puts as protection could prove sensible and keep lady luck smiling. Having stuck in a range for the last 6 odd months between 4600 and 5200 levels, this year could see the range being broken either ways. Sustained buying with improved investor sentiment can happen only above 5700 levels or around 3700 levels. Budget expectations on the domestic front could put an end to all the policy paralysis would set the stage for the year. The banking space could pull the index down in the next two quarters testing fresh lows with default being the buzz word. Nevertheless if not on January 24th some day the Central Bank will start cutting rates the economy will grow and Indian markets will outperform will make stock picking simpler and safer.

Key events before expiry :Reliance results-January 20,2012 ,RBI Meet-January 24,2012