The benchmark indices ended on a strong note after two days of consolidation. The BSE Sensex closed 138 points higher at 15,008, after seeing an intraday high of 15,026 and low of 14,599. The NSE Nifty closed at 4572 up 0.93% or 42 points. Among the broader indices ? the BSE Midcap Index was up 2.26% or 120 points and the Smallcap Index were up 140 points or 2.2%. This rally was led by infrastructure capital goods, power, telecom, pharma, banking, realty and select cement stocks.

The Nifty June future ended with a 13 point premium. The undertone of the market continues to remain bullish as huge buying is witnessed across the counter. Technically speaking markets are extremely overstretched as the RSI is at 77 indicating caution going forward. But if we look at the market breadth and the undercurrent, it signifies that this uptrend has further leg going forward.

The outlook still remains optimistic, but caution should be maintained at higher levels as huge profit booking cannot be ruled out. Nifty faces very strong resistance at 4660, which happens to be the top of 12th Aug’08 from where markets witnessed a significant downfall. What we believe at this current juncture is that the upside is very limited and one should play along with trend with limited profile. On the F&O side we have seen 4800 CALL adding 6 lakh shares in open interest and 4300 & 4400 PUT adding 5 lakh shares in open interest. This clearly suggests that Nifty will remain in the range of 4400?4800.

For tomorrow’s intra?day trading, support for nifty is at 4520 and resistance is placed at 4580. Fresh buying allowed only if Nifty maintains above 4580, next level could be 4620?4660.

Sectorally, Pharmaceutical stocks are giving strong evidence of a big breakout.