NIFTY TIPS FOR 14 JUN 2012

The S&P CNX Nifty jumped 61.80 points to settle at 5,115.90, its highest closing level since 3 May 2012. The index hit a high of 5,128.90 in intraday trade. The index hit a low of 5,015.15 in intraday trade, its lowest level since 8 June 2012.

Today's consolidation seemed to be an indication that the market priced in rate cut hopes.

 The market is keenly waiting for inflation data for May that will be announced tomorrow; Inflation after a flat industrial output for April will be key factors for the Reserve Bank of India while taking decision on monetary easing. Strong expectations have been building up since last month that the central bank may cut repo rate or cash reserve ratio by 50 basis points to give a boost to sluggish economic growth.

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 The rate cut expectations have been led by deterioration in economy data and warns that the market may see sell-off if RBI disappoints next week.

The Indian rupee appreciated by 25 paise to 55.54 as against the US dollar at the time of closing of Indian equities.

On the way up, the levels from 5140 the initial resistance and through 5170-5190 would be the most critical supply zone to cross; once cleared firmly, the bulls would be on a much stronger wicket. While crossing the 5190-mark would only confirm the intermediate uptrend, taking out the 5210-level firmly on closing basis would put the bulls firmly in the driver’s seat.

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Resistance 1	5140	Support 1	5090
Resistance 2	5170	Support 2	5070
Resistance 3	5210	Support 3	5020