Nifty yesterday tested the 5285 level which we have been mentioning for some days now before retracing a bit. In making the high of the day, we also breached the highs for May, the first market to do so. We have in doing so also closed just above the 78.6% retracement of the whole fall from April 10. While a close above today's high augurs well for the Nifty in the medium term, in the short term, a correction is very likely since we are now have now closed positive for the last 7 days and the tempo seems to be slowing quite a bit.
Shorts can be initiated if Nifty moves below 5200 with a stop loss of above 5235. On the other side, if Nifty continues its run existing long positions can be held with a similar stop - Stop below 5235. On the higher side, Nifty faces resistance at 5335 and then at 5400. Supports for Nifty exist at 5215 and 5140. Nifty PCR for yesterday was 1.64
Regards
Prashanth
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