Nifty opened at above 5800 but could not maintain this level
and made a low of 5762 finally closed at 5770.The Nifty snapped its vertical
rally on the 4th day again. After three up-day sessions filled with large gaps
the index stumbled again this time on the 4th day just as it did on June 18.
Plenty of problematic news items we would have to negotiate with and the Nifty shows an all too apparent nervousness by
trading below the 5800-mark —down by 62.50 points on good volume....
Among the bad
news is the new RBI draft guidelines for banks to provision higher for loans
given to companies with unhedged forex exposure, Crude oil prices rising again
after Egypt unrest and Asian markets are falling on the back of losses suffered
on Wall Street last night. Since the Nifty went up with gaps during the last
four sessions, we may see gap down opening clearing a few critical support
levels. Most important support area below 5840 for the day is located between
5820 and 5800—if this range is taken out gap down and the gap is not fully
filled then we can see further weakness developing. However, unless the level
of 5750 also gives in to selling pressure we may see some kind of a recovery.However, as we said earlier, we would continue to consider this upswing as a corrective upswing so long as it does not get past the Nifty 5940-mark decisively. As we said earlier, all projections beyond this level currently would be wee bit too premature.
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RESISTANCE:5800, 5840,5880
SUPPORT:
5790, 5750,5720
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