Aug 6,2007

NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY closes at 4401.55.

Chart patterns and technical patterns are not encouraging and indicate a decent correction in recent future. NIFTY has closed below medium term sma consistently for the past 3 days indicating weakness. Although NIFTY bounced back on Friday, it could not convincingly close above medium term sma. Already NIFTY tested the medium term term trendline 3 days back and stays below it. NIFTY might test the 50 day moving average again in the recent future and fall free from that levels.

Friday's rally has ensured an intraday high above 4436. But the time taken to test it is unpredictable. A high above 4534 and a low below 4305 are inevitable. The timeframe for them to take place is unpredictable.

If the US subprime crisis deepens, it could definitely affect the liquidity factor in all Asian markets, since Hedge Funds have much leveraged positions in Asia. Hedge Funds are directly or indirectly financed by subprime funds.

Caution: Don't take any fresh long or short position.Market might move either side with higher volatality, due to fundflow differences in world market.

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 in some future date. The time frame for it to take place is unpredictable.

Upper band -> 4662.

Lower band -> 4304.85.

In case of any downside look for lower band. 30-40 points below lower band could act as an intraday support level.

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.