The month of January 2011 was not good for the markets as we saw Nifty making lower high and lower lows, hence continuing the down trend. On last Friday Nifty managed to close above the support of 5350 level which can offer strong support for short term. If Nifty futures trades above 5350 for 4 sessions continuously then we can touch 5550 level in one or two sessions. Also on downside if Nifty breaks 5350 and closes below that level for at lest 2 days then the down trend will continue and create more selling pressure hinting 5060 level and then 4888 level. So a trader has to be cautious at these levels as higher risk is on the way.
When we talk about nifty futures technically nifty is having strong support at 5350 level and resistance near 5550.
Our trading strategy for next week 7 February 2011 : Buy nifty above 5365 level for weekly target 5530. Also place stop loss near 5335 on closing basis.
Sell Nifty Futures below 5300 for weekly target 5199. Stop loss should be placed near 5355 on closing basis.