CRUCIAL DAYS AHEAD

Nifty opened the day with a positive bias and made a high of 5421, but stayed range bound for the entire day , before closing at 5359 , marginally higher by 0.94%, obviously no guesses, the major contribution was made by Bank Nifty which gave a thumbs up, to the unexpected cut in CRR by the RBI, much before the quarterly monetary policy review, while the other star performers for the day were, RIL, LT, SBIN, REL INFRA and BHEL. At one point of the day the market gave away all its gains , but the overall market breadth was positive with 883 advances to 592 declines and both FIIs and DIIs were net buyers to the tune of 1298 crores and 203 crores respectively. On the futures side, Nifty Futures settled at 5388, with loss in open interest, indicating some profit booking , with reduction in premium from 38 points on last Thursday to 29 points yesterday. On the options side the PCR reduced from 1.16 to 1.06. The 5200 and 5300 calls lost the maximum open interest for the second consecutive session, while the 5500 call added the maximum open interest. On the put side 5400 put added the maximum open interest followed by the 5200 put, while the 5300 put shed the maximum open interest, more than half of the open interest added on Friday. This entire activity on the F&O side indicates market participants using the rally to book profits. On the technical indicators side, the gap up closing of Friday and yesterday's positive close, has created a positive momentum, but the trend has to continue for few more sessions before it can be confirmed. The key levels to watch out for Nifty will be 5411 and 5453 on the upside and 5300 and 5275 on the downside. The domestic data was encouraging, with the  IIP data showing the fastest growth in the last 7 months,during the month of January. The international markets were trading flat amid growth concerns from China. Going forward this week, all eyes will be on the  Union Budget and the RBI policy review.