DISILLUSIONED

As expected, Nifty opened on a negative note, and somehow tried to enter the positive territory but met the overhead resistance of 5350 and for the rest of the day there was nothing to stop the selling and it breached the crucial level of 5266 and closed at 5257, barely above its 50-day moving average at 5252.The only thing to draw solace from, was that the day was not marked by high volumes. The market breadth was clearly negative with 434 advances to 1052 declines, while the FIIs were net buyers to the tune of 162 crores and the DIIs were net sellers to the tune of 295 crores. Nifty Futures closed at 5277, 20 points premium to the spot, with, a moderate loss in open interest. On the options side the PCR was down to 0.88. On the call options side there was considerable addition of open interest from 5000 to 5500 calls, while on the put side there was a considerable shedding of open interest from 5300 to 5600 puts, with a exception of 5100 put, which added the maximum open interest, followed by the 5200 put. This entire activity on the options side along with a moderate fall in the VIX, indicates fresh call writing, in the absence of any positive events, which is going to make any upmove very difficult. On the technical side the daily charts are showing a clear trend change, but the weekly charts are still in a uptrend. According to time series analysis Nifty must maintain the level of 5291 by the 22nd of March in order to keep the uptrend intact. The levels to watch out for Nifty tomorrow will be 5322, 5343 on the upside and 5216 , 5285 on the downside.The U.S. markets are trading in the green on the back of mixed manufacturing and housing data, while Europe and the rest of Asia have remained flat for greater part of the day.