May 17,2007

NIFTY OUTLOOK (Based on TECHNICAL ANALYSIS)
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NIFTY CLOSE 4219.55. SENSEX close 14299.71.

As mentioned in previous post a close above 4150 has made NIFTY bullish. Similarly it was mentioned earlier a high above 4217.90 is inevitable, which was tested yesterday. But it didnot test previous highs. If NIFTY closes above previous high 4224.25 by a significant margin, many equations could change. An intraday high above previous high of 4245.30 implies another intraday high above the new high in a future trading day.

For intraday traders a 20 to 30 points above the upper band 4221.50 would act as a resistance. The outlook is neutral, neither bullish nor bearish and little bit indecisive. As NIFTY has closed near upper band some dilemma has cropped in. How long will the rally continue is unpredictable. As of now there are no upper targets.

A likely low below 3982 is inevitable. Although, the timeframe to test it might be unpredictable. NIFTY is likely to test a low below 3800 in the medium term.

When there is a deep correction, an intraday low below 3575 is likely (medium term to long term). It does mean that it is the time to book profits.

If there is an upward momentum, book profits systemmatically, whenever the stock price is fully valued. Long term investors should utilise this opportunity.

Immediate support level for NIFTY stays at 4155. No immediate resistance. Previous high of 4245.30 stays as a short term resistance.

UPPER BAND-> 4221.48

LOWER BAND-> 3982.83

Note: These views do not have any relevance to NIFTY futures.

STOCKS TO WATCH
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[NO STOCKS]-> As profit booking is recommended for the past few days, short to medium term stock recommendations are not made in this column.