Wednesday, September 26, 2007

Sep 27,2007
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 4940.50. Sensex Closes at 16921.39.

NIFTY has signalled indecisiveness again. But NIFTY would surely test 4980 levels in the future. There is a confirmation of two more intraday highs to yesterday's high. These two highs need not take place immediately.

NIFTY is in dangerous zone. It is the time to start booking profits, irrespective of upward momentum. Higher volatality might bring a sudden fall, if there is any negative trigger. Time to trade cautious. Avoid fresh longs.

As per the Fundamentals NIFTY could just move up by 10-15% from these levels. The higher levels to be tested has got a time lag till next march. But high momentum prevailing at this juncture could be used to book profits and re-enter at lower levels.

As mentioned in previous post NIFTY is likely to test a low below 4446 and 4453 in short to medium term.

Support is at 4923.60.

Rupees appreciation against dollar is a dangerous proposition for Indian Economy in long term. It might prevent and discourage new investments in Export oriented industries. Textiles, IT and other exporting industries, which have a major contribution in Indian Growth story might not have encouraging growth and end up in economy slowdown. If IT industry gets affected, spending could comedown and affect Real Estate firms, Banking, Consumer Durables,etc. Moreover, there is a chance of huge trade deficits and current account deficits, which could encourage FII outflows, which might affect markets.

Upper band -> 4955.

Lower band -> 4226.



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

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