The recent divergence in Nifty failed to deliver - with Nifty closing near fresh 52-week highs. Indian markets have continued to march upward despite a weakening of sentiment across major European and American equity indices - which makes it even harder to predict the short term directional moves. In Nifty and Sensex - there are various technical parameters which indicate the short-term strength to be overblown - however - with the Index at fresh 52-week high, we cannot discount the possibility of a sharp spike higher purely due to weak shorts stopping out in a rising market. There is some chance that Nifty might spike to 5700-5750 areas, however - it's not a high probability setup. Thus, for the time being I think it is best for risk averse traders to remain on the sidelines.
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