Sunday, February 17, 2008

Nifty Resistance at 5432 Support at 5121

The week began on a bad note with erosion of 300 points from the
Nifty. Weak listing of REL Power rubbed salt on the wounded Bulls
but they still showed courage later and prevented further slide.

Counter attack which was ignited caught flames on Thursday and Friday. The Bears were spectators to the strong 500 points recovery. As anticipated, R-group and Banking stocks led from the front;later other sectors and Midcaps enforced the rise

It was mentioned last week that the fall is likely to get arrested after 5 bearish candles. High risk traders who bought in declines can take part profits in further rise or hedge with options in anticipation of a pre-budget rally in the last week of February series. Retracement of the entire fall from 6357-4448 points is pegged at 5402 (50%) and 5628 (61.8%) points. Daily trendline
support is away at 4915 points.

On the weekly chart we are seeing a hammer formation while on daily a lower top and higher bottom formation. The Nifty has to decisively cross 5545 points for continuation of the up move. Above that, the 5628-5652 points’ area will act as stiff resistance. Supply is expected at the above levels, hence traders should be cautious.

Immediate hurdle is at 5432 points and support is pegged at 5121
points. We have seen excellent team work by the Bulls; any selling
pressure should be taken in stride to achieve the 5550 and 5700
points mark in the next couple of weeks.