HBJ Capital’s predication for Monday proved correct, what’s up on Tuesday? Read now.

HBJ Capital Report....
[Publisher of "10in3" (Small Cap with 10 times in 3 years potential) Equity Research Report & "Street Smart" (Lots of Investment Ideas) Newsletter]

Indian stock market posted a dramatic recovery in the last hour of the trading session on Monday, smart recovery towards close of trading session mostly led by short-covering in banking stocks helped benchmarks close on a flat note.

Bombay Stock Exchange’s Sensex closed at 14,538.94, down 25.59 points or 0.18 per cent. National Stock Exchange’s Nifty ended flat at 4360.55.

Volumes are very low. Unless Nifty breaches 4600 level and stays there for some time, any recovery will be treated as a short-term pullback. The options data suggests strong resistance at 4400 level.

>>>>Any negative development on the global market front and likely surge in crude on tropical storm Gustav may check bulls in the near term.

>>>>However, if global cues are positive one can go long on Nifty in early trade tomorrow if there is no gap up openings.

>>>>In case if there is gap up opening of more than 1% then traders should wait and go long before the closing bell.

The momentum indicators are also supporting the market on the upside, with a target of 4,600 and a stop-loss at 4,200. The short-term resistance is seen at 4,400. Calls were bought and puts were written at the 4,400 strike price, indicating that both buyers and sellers expects index to trade above the 4,400 level.

- HBJ Capital Team.