Aug 7,2007

NIFTY OUTLOOK - TECHNICAL ANALYSIS
__________________________________

NIFTY closes at 4339.50.

It has been consistently mentioned that an intraday low below 4305 is inevitable. It was tested yesterday. As a rule, we used to mention that 30-40 points below lower band would act as support levels. NIFTY exactly behaved the way it is being mentioned. The lower band mentioned yesterday was 4304.85. The level from which NIFTY had a bounce back was 4267.15. NIFTY closed below 50 day sma. It is not a good sign. If there is another one or two closings below it, then a huge correction could be expected.

Although chart patterns are not looking good, markets are purely driven by some trends in the international markets. So, the positive upsurge in US and Asian markets may help NIFTY to move up in short to medium term. So, sharp volatality in the market could be expected.

An intraday high above 4436 and 4534 are inevitable. But the time taken to test them are 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 -> 4666.

Lower band -> 4296.70.

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