Global cues have been positive as DJIA and other European indices were trading positively

Nifty forms a shooting star after four consecutive weeks of upward momentum indicating some indecision at higher levels. It had been one of the best rallies Nifty posted since last September but a Shooting star now makes it suspicious going forward as the strength of bulls seems to be fading while profit booking is seen in the area of 11500 - 11600.

A shooting star, a Long shadow on the upside with small body below the belt, is seen as a sign of indecision in bulls and bears and is an outcome of the same. The importance of the formation increases after a sustained upward move and that too when it's on the weekly chart makes it very critical.

Global cues have been positive as DJIA and other European indices were trading positively. Specifically, DJIA rallied post dovish comments by Fed in its meet as they held on to no change in rates this week. European indices did see some profit booking at higher levels.

Crude is another factory that can be seen as a culprit to this profit booking as it rose to $690 mark while USDINR also saw some rebound from lower levels. Crude rose amid supply-side concerns with recent sanctions on Iran and Venezuela. USDINR further added some pressure as it was sustaining the lower levels of $69.

Though recently we have seen some good coupling between Indian equity markets and western indices. This is seen after a few weeks as Nifty was able to sustain at much better levels as compared to world indices.

Technically Nifty has sustained the 50 MA on weekly chart which is at the much better position with 100 Days MA below it. Usually, these are long term supports and we do see a sustained move after these levels are tested. That is what we have seen here. We think this is a price wise correction which is due and is of course needed to lighten up and push out the weak money. Point of inflection for Nifty is seen at 11320 - 11280. The Trend is up and intact. Hence dips to these levels will be utilized by bulls. We also have expiry next week and writers will jump in to eat the premiums. So we are looking at some consolidations in the market in a small range. It will be important to see the rollover numbers of the index and blue-chip stocks that are leading the rally. Any divergence over there shall act as a warning signal.

We maintain buy on dips as a strategy.