June 11, 07

NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY closes at 4145. SENSEX closes at 14063.80.

Chart pattern and technical indications for NIFTY is not encouraging. Short term SMA has crossed over Medium term SMA indicating possible fall. PCR OI has substantially dropped, indicating diminished strength.

There is a confirmation for another low below Friday's low of 4126.10. However, there is a strong support at 4050-4100. It has to be watched if the support region could be broken. Medium term trend line got broken before two trading sessions, which made the medium trend vulnerable. Even if there is any upmove, it might be used by many people to book their profits.

It is consistently mentioned about the possible lows in this page - "possible lows below 4145, 3985 and 3800 are inevitable." As per our view NIFTY has tested 4145. Expect the rest of the lows to be tested. The time frame for it to take place is unpredictable. Similarly, another new high on intraday basis above the ever high 4362.95 is inevitable too with an unpredictable time frame.

Markets likely to face lower liquidity after public offers of DLF, ICICI BANK, etc.,. Since these issues are larger issues they may suck some liquidity out of the market, which may affect the further up move in the NIFTY after few weeks.

As per our earlier view RBI has strarted participating in forex markets actively, which helped Rupee depreciate. This would urge the FIIs to move out of Indian markets, as it would depreciate their investments value. It affects liquidity and helps market correct, which is essential to stay healthy.

Upper band -> 4347.81

Lower band -> 4094.20

Lower band and 50 day sma at 4071.40 might act as a support. But if there is a bearish onslaught, these support might not withstand.

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

RUMOUR: Markets may witness another black monday today.

Stocks to Watch
[NO STOCKS]-> As we advised profit booking for many weeks, no buy calls were mentioned here for many posts. We maintain the Status quo.