Nifty bullish if stays above 5425

The overseas investors were net sellers to the extent of Rs 2767 Crs and that saw the INR close at the 63.20 levels vis-a-vis the USD (previous week 61.65 levels). The US headline indices saw the old economy index DJIA wilt under selling pressure, even as the Nasdaq Composite rallied. The UK FTSE 100 witnessed a mild decline in tandem with the DJIA. In the Asian region, the Japanese market was the out performer during the week whereas the fall was led by the Singapore, Hong Kong and Chinese markets. The overseas cues have been cautious and the domestic markets will require concerted buying to rally from the present juncture.

Technically, the domestic markets have declined for 5 consecutive weeks and have exhibited a doji on the weekly charts. That offers some probability of a pullback as the bear covering cum fresh buying can lift indices higher. The weekly range advocated for the Nifty between the 5675 / 5325 levels was violated as the benchmark tested the 5254 levels, thereby exceeding our parameters on the downside. The coming week is likely to witness a range of 5625 - 5675 on the upside as long as the Nifty stays above the bullish pivot at the 5425 mark. In case of declines, the Nifty is likely to test a level of 5325 below which the 5100 maybe seen as long as the bears keep the Nifty below the 5350 levels. Upthrusts are likely to be corrective pullbacks in nature rather than conclusive trend reversals.