Nifty may remain under pressure at 4630-4650

The Nifty tried to rebound from its 20-weekly moving average (WMA) (4667 as on Friday) and 4650 during the early trading hours, but it declined sharply after the index breached past its 100 Day Moving Average.

In the near term, the Nifty may continue to feel pressured by 4630-4650, as the range not only encompasses its 100 DMA, but also a long term trendline joining its lows during the last bull phase (i.e. lows made during March 2004, April 2005 and June 2006).

On the downside, the index will have to hold on to a near-term support of 4450 (coinciding with January and March 2008 lows) or it stands a chance to fall towards 4305, which is the 50% retracement level for the past year���s bear market plunge.

Looking at the November options, however, the likelihood of a pullback from 4500 is more, given the average build-up of 6.3 lakh shares in November 4500 puts and in-the-money 4500 calls. The build-up in November calls of 4600-4700 strikes, however, indicates traders are pessimistic.

Stocks F&O

Tata Motors has managed to stay above its 50-DMA. Besides this key indicator, a trendline joining its lows from early August increases the importance of Rs 545 as a support. In the near term, a breach on either side of Rs 545-573 will trigger a directional move. The view is validated by the gain in open interest of November 580 calls and 540 puts.

Maruti Suzuki was among a few gainers in Nifty stocks on Tuesday. The upside of 2% on Tuesday has brought a halt to slide of more than 20% in the stock from its all-time high.

As long as Rs 1,470 caps the upside, the stock is poised for a decline towards Rs 1,370, derived by a trendline joining May-June 2009 highs and August 2009 low.