DEC 23,2007
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 5766.50.

Although NIFTY is yet to set a trend and remains trendless, it seems to have bottomed out. So, a pullback can even be expected from this level.

NIFTY stays at a crucial break out level. If NIFTY pulls back from this level, it may not be surprising. However, this is the settlement week, which signifies volatality. Any influence of world markets cannot be ruled out. So, either way breakout is not ruled out.

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

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 -> 6050.70.

Lower band -> 5507.60.


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

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