Oct 3,2007
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NIFTY OUTLOOK - TECHNICAL ANALYSIS
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NIFTY Closes at 5068.95.

NIFTY has 10 consecutive positive candles. So, a consolidation or a little downward movement could be expected. Though the momentum seems to look good, it is safe to book profits in majority of the stocks.

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 march - may. But good 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 medium term.

Support is at 4986.55.

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 -> 5121.75.

Lower band -> 4237.



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

Stocks to Watch
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