May 25,2007

NIFTY OUTLOOK (Based on TECHNICAL ANALYSIS)
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NIFTY CLOSE 4204.9. SENSEX close 14218.11.

NIFTY has closed below short term moving average after 8 trading days. It is not very encouraging. Upward momentum gets a breather. It has to be keenly watched before taking any position. A close below lower upper band around 4217 too doesn't go well with the NIFTY. So, it has to be watched, if the rally could be sustained.

But liquidity and other factors could change the trend. Liquidity might get sucked out, after the two large public offerings - DLF and ICICI bank. It could affect the bull rally to some extent. This is a note of caution for long term investors.

Any trading position should have a strict stop loss. If NIFTY closes below 4178, the strength of the rally might weaken.

NIFTY has an upper target above 4415. But the timeframe for the target to be achieved is unpredictable.

A likely low below 3982 is inevitable. Although, the timeframe to test it might be unpredictable. NIFTY is likely to test a low below 3800 in the medium term.

If there is an upward momentum, book profits systemmatically, whenever the stock price is fully valued. Long term investors should utilise this opportunity.

Immediate support level for NIFTY stays at 4155. Immediate resistance stays at 4256.25. Strong support stays near 4050-4100 level.

UPPER BAND-> 4282.99.

LOWER BAND-> 4020.5.

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

STOCKS TO WATCH
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[NO STOCKS]-> As profit booking is recommended for the past few days, short to medium term stock recommendations are not made in this column.