NOV.1,2007
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 5900.65. Sensex Closes at 19837.99.

NIFTY is moving on expected lines. It is consolidating.

US Fed rate cuts likely to have little impact for shorter duration, an upside around 1-2% to the maximum could be expected. It might not have major impact.

NIFTY is likely to test 5816 in short to medium term.

It is the time for consolidation or stay indecisive, since the volatality levels are high and the market is in overbought position. It is time for another corrective wave to take place, if the markets move up further. So, profits could be booked systematically, if the markets move up.

This time domestic money's contribution to this upmove is very significant. So, stay cautious.

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

Support is at 5644.

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, Pharma, SMEs supplying raw materials, SEZs, etc., which have a major contribution in Indian Growth story, might not have encouraging growth and end up in economic slowdown. If IT industry gets affected, spending could deplete 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 -> 5972.45

Lower band -> 4977.


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

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