NIFTY TIPS FOR 12 JUN 2012

The market surged in early trade. Nifty hit five-week high. The market trimmed gains after hitting fresh intraday high in morning trade. The market reversed intraday gains to hit fresh intraday low in late trade.Bulls were brought back to earth with a thud after rating agency Standard & Poor’s cautioned that India could lose its investment grade status because of its worsening economic fundamentals.

First, we should observe if the index manages to stay above the critical level of 5093 once it crosses that either on opening or during intraday upswing. Any failure to sustain above this level would mean a probable range bound Nifty movement again.
This time it could well be quite volatile, and we may see wild swings on either side—up or down. We continue to expect profit booking unless after opening gap-up the Nifty clears the level of 5126 as well. The most crucial battle between the bulls and the bears would be fought between 5126 and 5075—this would be like the four central squares of a chess board that the opponents try to control.

In case of a fall from higher levels, the major support would—of course—be provided by the Nifty levels between 5050
Above 5100-mark once this is also cleared we would be bracing for the final assault between 5145 and 5151.

Thus, the Nifty signposts have been identified for all types of traders and market participants. For traders, the most effective strategy could be the difficult game of buy-on-weakness-sell-on-strength within the anticipated index zone as outlined above; for investors, it is a sure buy-on-dips market especially as and when you find the Nifty coming down to the range between 5050 and 4950. Chances are quite bright barring a catastrophic development in the European crisis; we would finally see an intermediate uptrend shaping up now.

You can also check for option

Resistance 1	5090	Support 1	5030
Resistance 2	5140	Support 2	5000
Resistance 3	5210	Support 3	4935