The new Indian Cricket team !

The big guys are back ! ... back to their old antics, I mean ;) The very next day after Reliance declares its hefty results and the day Bharti comes out with its better than expected results, the big boys show who the boss is, hitting a century on the nifty without batting (pun intended !) an eyelid. BCCI should get them in our cricket team, I would say ! They took most of the index heavyweights to the cleaners, be it Reliance, Bharti, ONGC, Tisco ... and to think that just yesterday, everyone was talking about how we could hit a new alltime high !
So, are we done and dusted for now ? Was the sharp rally we saw this month a flash in the pan ? To answer that, we first need to understand what caused the selling today. My view is that firstly, the undue euphoria of the credit policy is slowly sinking in. Second, we are at the fag end of the results season, and there isnt going to be any major trigger in the very recent future. Third, scrips like Reliance and Bharti had seen a substantial rally pre-results and thus witnessed profit booking. Finally, the bears that had been squeezed all throughout the last week or two showed resolve and came at the bulls right from the opening bell with a renewed vigour. Remember, allowing bulls to take out the previous top would mean we potentially open fresh upsides, which is something bears cant allow. On the other hand, failing to break the previous high can potentially result in a double top which could mean retrace of a large part of the gains we saw in this month.
For now, I would watch 4040, which I expect to hold and as long as its not breached with conviction, the trend remains up and we would attempt a break of the previous highs once again. Below 4040, 3940-3905 range is what would provide support for Nifty and as long as that holds, the strength of the rally from the recent lows wouldnt be in question. the downmove would still qualify as a correction of the recent rise we have seen.