NIFTY OUTLOOK & FREE NIFTY TIPS FOR 10 MARCH 2016

"BUY NIFTY ABOVE 7530 TGT 7570/7600 SL 7490"

After taking a breather and showing signs of fatigue and uncertainty in the past two trading sessions, the Indian market resumed its northbound journey. Weakness in the Asian markets dragged indices to open with a negative gap down. However, the decline was very short lived as indices gained strength as the day progressed. Nifty re-conquered the 7500 mark for the first time since February 1, 2016. Nifty managed to find support even before hitting the 50DMA, which is placed at 7400 mark. It also has formed a “Last Engulfing” candle stick pattern, which indeed is a bearish reversal pattern. However, this pattern has a tendency of acting as a bullish continuation. As long as there are no evident signs of a trend reversal, it would be advisable to ride the ongoing uptrend.

The Nifty 50 futures contract has been trading between 7,400 and 7,500 levels for the third consecutive day. It fell to an intraday low of 7407 and then bounced higher. But, 7400-7500 range remains intact. As long as the contract trades above 7400, a rise to 7470 and 7500 – the upper end of the range is possible during the day.

However, a breakout on either side of 7400-7500 will decide the next leg of move for the contract. Traders can stay out of the market until there is a clear signal.

A strong break above 7,500 will take the index futures to 7,550 initially. Further, a break above 7580 will see the rally extending to 7600 and 7650. On the other hand, a break below 7400 will increase the downside pressure. Such a break can trigger a corrective fall to 7,330 and 7,300.

STRATEGY: GO LONG FOR THE TGT 7600 WITH SL OF 7450

Supports: 7,400, 7,370
Resistances: 7550, 7,600