Jan 17,2008
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 5935.75. SENSEX Closes at 19,868.11.

"An intraday low below 6022 is inevitable." This is a quote from previous post. These levels were tested yesterday.

NIFTY traded below short term SMA for three days, which triggered the fall. However, a consolation is NIFTY closing above 50 day sma,although it tested it. There is a possible bounce back from these levels, provided a good buying support and global cues.

NIFTY is likely to test 6345 levels within March. So, the plunge we're witnessing is a short term bias.

Next support level stays at 5769.55. If there is further downward trend, then NIFTY would test the lower band 5711.25.


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

IT sector may be a surprise participant in the next leg of rally.

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 -> 6439.42189.

Lower band -> 5711.25.


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

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