Oct 15,2007
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 5428.25.

NIFTY is likely to test a low below 5395 in the near future. Trade with utmost caution.

Sensex has almost tested the top for the FY 08, based on fundamental analysis. Further gains in Sensex implies a shift in valuation. Longterm investors should book profits, wherever they find their stocks fully valued. Indian economy is not looking so rosy and its growth momentum likely to slow down, based on various parameters.

NIFTY is in dangerous zone. It is in super risk 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 mentioned in previous posts, NIFTY is likely to test a low below 4446 and 4453 in medium term.

Support is at 5225.63.

Longterm View:
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Rupee' 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 and other industries, which have a major contribution in Indian Growth story. These sectors might not grow fabulously in the years to come, which would result in economic 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 -> 5616.

Lower band -> 4357.


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

Stocks to Watch
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NONE