Today Sensex pared
most of its early morning gains and was trading flat in afternoon trade on
Thursday, Tracking the momentum
in the Nifty index, also came off from its intraday highs, but was still
trading above its crucial psychological support level of 7600.Today nifty
future started at 7642 made a high of 7674 and low of 7628 and closed at 7660,
total 46 points was moved by nifty future. The nifty future after an initial
phase of volatility in yesterday’s session did show a short term reversal
signal in the end by moving up nearly 1%. However, being a counter-directional
rally it faces a major test today in that it needs to cross the most difficult
supply zone between 7620 and 7670 within which the range from 7640 through 7680
would act like an acid test zone for the bulls. We can only trust this rally to
bring in more gains if these levels are crossed and the index stays above the
critical zone aided by a lot of volume activity. If the Nifty future crosses 7680
successfully then the next target would be 7700 – 7800. We continue to hold our
view to create longs at 7400-7450 levels in spot with a Stop loss of 7290 in
spot (Closing Basis) for targets of 7900-8000 by mid-August.