The Nifty has been trading in a narrow range over the last few sessions even as the daily momentum has remained in the oversold territory.
The Nifty has traded in a range of 5,320-5,400 over the last three sessions and 5,400 has now become a very crucial level for the future direction of markets.
A break and close below 5,320 will mean that the short term trend has reversed. Till that happens, stock rotation could continue for a couple of more sessions.
I advise traders to be cautious on the long side and keep 5,320 as a reversal level in the mind.
A break and close above 5,410 would mean that the correction is not coming just yet and the move is likely to extend to 5,500-5,550 levels.
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