IFCI research, 16 March 11: Watch Nifty

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Watch Nifty

Ø  Nifty, as we feared, reacted sharply and that too before touching 5600. Though it recovered more than 100 points from the day's low, it does not inspire confidence that the recovery could sustain. We would advise investors to consider buying put options on any pull back as a hedge against their portfolio. There is a strategy of shorting Nifty and going long in Bank Nifty. Investors may please note that Bank Nifty also is moving in sync with Nifty. Bank Nifty would also move down to touch earlier lows if it is unable to move past 11300. However, stops are advised to be in place.

Ø  It may be noted that we had mentioned  5370 as a good support level for Nifty ( 14/03). Investors would have noticed the way Nifty bounced up from the above level.

Ø  Nifty's resistance for 16/03 is expected around 5500, 5550 and supports around 5370 and 5330-40.