July 27,2007

NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY closes at 4619.80.

NIFTY is likely to test a low below 4620.50. US market crash likely to have some impact on our markets too. NIFTY tested the short term sma for the past two days. It is likely to test it today(4603)also. Higher volumes implies higher risk. Trade with caution.

NIFTY has signalled possible intraday low below 4490. NIFTY tested the upper band intraday, it couldn't close above it. It implies the presence of higher volatality, which reminds us to trade cautiously.

Higher PCR OI implies too many hedge positions, preventing NIFTY from a drastical fall.

NIFTY is sure to test 4345 and 4302 levels. Trade with utmost caution and stoploss. But NIFTY has a good support at 4543.75, 4488.15, 4381 and 4328 levels. Expect NIFTY to test 4480 levels in the recent future.

Commerce ministry,Finance Ministry, PM and RBI are discussing the ways and means to help exporters from crisis due to appreciating Indian Rupees. So, some measures could be expected, which would help Rupee stay afloat or depreciate. A depreciating currency would encourage FIIs or hedge funds to book profits and encourage outflow of currency. This might result in lower liquidity. The current rally is due to higher liquidity, rather than fundamentals. But it might take some time for such measures to affect the markets. This is an ideal situation, where every upmove could be utilised to book profits. Long term investors could use the cash in hand, when there is a decent correction. So, systematic selling is recommended.

Liquidity would be the dictating factor in the days to come. 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.

Upper band -> 4678.60.

Lower band -> 4237.50.

For intraday traders 30-40 pts above upper band acts as resistance zone

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

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