Sep 28,2007
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 5000.55. Sensex Closes at 17150.56.

NIFTY and Sensex has closed above the psychological levels(5000 & 17000). Though the momentum seems to look good, it is safe to book profits in majority of the counters. Ofcourse, NIFTY would test the yesterday's high 5016.40. It need not be tested today itself.

NIFTY is in dangerous zone. It is the time to start booking profits, irrespective of upward momentum. Higher volatality might bring a sudden fall, if there is any negative trigger. Time to trade cautious. Avoid fresh longs.

As per the Fundamentals NIFTY could just move up by 10-15% from these levels. The higher levels to be tested has got a time lag till next march. But high momentum prevailing at this juncture could be used to book profits and re-enter at lower levels.

As mentioned in previous post NIFTY is likely to test a low below 4446 and 4453 in short to medium term.

Support is at 4923.60.

Rupees appreciation against dollar is a dangerous proposition for Indian Economy in long term. It might prevent and discourage new investments in Export oriented industries. Textiles, IT and other exporting industries, which have a major contribution in Indian Growth story might not have encouraging growth and end up in economy slowdown. If IT industry gets affected, spending could comedown and affect Real Estate firms, Banking, Consumer Durables,etc. Moreover, there is a chance of huge trade deficits and current account deficits, which could encourage FII outflows, which might affect markets.

Upper band -> 5010.70.

Lower band -> 4232.



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

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