Bears still on the prowl, the waiting game is on

Special to Firstpost

S&P CNX Nifty (5,366.40): The range-bound price action persisted during the week gone by. Either a move above 5,605 or a fall below 5,300 would set the tone for the next major move in the index.

The weak trend in index heavyweights such as Reliance Industries and Tata Steel suggests that the Nifty could drift lower to the major support at 5,230. From a trading perspective, it would be safer to wait for the index to get out of the 5,300-5,605 range before taking a big positional bet. Compulsive traders may consider short positions in the Nifty via the options route.

[caption id="attachment_28019" align="alignleft" width="380" caption="AF Photo"][/caption]

BSE Sensex (17,870.53): After an attempt to move up in the early part of the week, the trend turned bearish in the latter half. The index has to get above the resistance at 18,363 or fall below the support at 17,780 to trigger the next major move.

Though the price action this week has strengthened the case for a downside breakout, it would be safer to wait for the index to close below 17,780 before considering short positions.

More from Investing

Reliance Industries (Rs.868.40): The stock has been cascading lower in the past few months. The fall appears to be gathering momentum and the stock could test the support at Rs 835.

Short positions may be considered on rally, with a stop loss at Rs 905. Unless the stock moves above Rs 969, there would be a strong case for a slide to the major support at Rs 760.

Tata Steel (Rs 572.25): The stock was among the prominent gainers of

Friday's trading. The recent downtrend is likely to resume once the minor recovery that started Friday gets completed.

The stock is likely to fall to the support at Rs 530. A move to the resistance at Rs 580-582 range would be a shorting opportunity with a stop loss at Rs 604.

The views and recommendations featured in this column are based on the technical analysis of historical price action. There is a risk of loss in trading. The author may have positions and interest in the instruments featured in the column.