Pre-Open Market Outlook(23-02-2011)
Last 6 days trading range is 5410-5600 and Indian markets are discounting Union Budget,Global markets crash and Libya internal problem within this range. Rally started from 5178 on 11-02-2011 but after eruption of Libya internal problems uncertainities increased in Middle East countries because there has already been anti govt. agitations in Yemen and Algeria and such revolts possibilities can not be ruled out in other neighbouring countries also after successful change of power in Tunisia and Egypt. As Petroleum supply may be interrupted due to all these developments therefore its rates hike and adverse impact on global economy is worrying factor and global markets reacting it with sharp declines.
Indian markets out performed global markets yesterday and were less than 1% down while other Asian markets closed with 1% to 2.6% loss and Dow's Futures was trading 133 points down. Market does not like uncertainities and rally begins after its end. This fact should always be kept in mind that rally started in Indian markets after the end of Iraq war on 28-04-2003. Crude is at 30 months high,it will certainly hamper global sentiment and markets therefore delay of rally is possible but denying signals are not seen yet.
Last 6 sessions trading range is 5410-5600 and this range forceful break out as well as sustaining beyond will tell Indian markets final reaction on Middle-East problems and Union Budget. Indian markets are preparing within mentioned range and last 3 sessions technical positions are as follows:-
1- Rally started on 11-02-2011 corrected sharply from 5600 on 18-02-2011 and candle was Engulfing Bearish candle.
2- Correction completion strong indication after base fornation within 5415-5445 on 21-02-2011.
3- Trading within 5440-5515 with Bearish Harami candle on 22-02-2011.
Last 3 Days intraday chart:-
It is clear from above intraday charts that there is clear supports at lower levels and resistances at higher levels and Indian markets will prepare for break out of last 3 days range. Expected first trading range of today is 5430-5480 and its forceful break out and sustaining beyond will give next move first strong indication. As sentiment is turning most depressing therefore moves below 5430 and 5400 may be seen and if Nifty sustains below 5400 then sharp declines will be seen. Until Nifty is sustaining above 5400 till then bullish hopes will remain alive and bullish market confirmation point is sustaining above 5558.
Market will react to global sentiments,markets and US futures also in the same manner as happened yesterday therefore today closing can not be guaranteed but expected that Nifty will trade most of the time between 5430-5480 and either close within this range or above it.