June 6, 07

NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY closes at 4284.65. SENSEX closes at 14535.01.

If Nifty moves below yesterday’s low 4249.1 (intraday), it provides the signal of caution. In such an instance, it is to be remembered the possibility of a low close at the end of this June month settlement, irrespective of any upside in between. So, consider this day as the trend setter.

It is expected that NIFTY might consolidate for some more time before the large issues like DLF, ICICI BANK, HDFC BANK, etc.,. Since this 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. Even the first quarter result season might have some impact in NIFTY.

It is advised to book profits systematically on every upward move, since there is a limitation for the NIFTY to move up further. Upside may be limited to 5-10%, which is not great. RBI might interfere in the forex markets at some point to stabilize the appreciation of rupee. If rupee starts depreciating, it would urge the FIIs to move out of Indian markets, which would ensure some fund outflow. On such a circumstance a deep correction could be expected. So, exit when the sky is clear.

Another new high on intraday basis above the ever high 4362.95 is inevitable, although the time frame for it to happen remains unpredictable.
Similarly possible lows below 4145, 3985 and 3800 are inevitable.

Upper band -> 4369.65
Lower band -> 4043.83

Higher upper band provides good scope for the NIFY if it moves up.

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

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