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Pre-Open Market Outlook(08-02-2011)

All trends are down. Nifty closd below Wave-3 trend line for the last 2 sessions and today closing below it will be trend line breaking down confirmation as well as technically confirmation bear market.

Wave-3 EOD Chart:-
(Just click on chart for its enlarged view)

Yesterday candle is "Harami Bullish" and intraday charts are showing mixed despite sharp slipping from higher levels. As mixed patterns therefore yesterday trading range(5380-5437) break out will be watched first for next move confirmations and break out implications are as follows:-

Breking out(crossing 5437) will mean minor pull back rally possibility with following resistances:-

1- 5450-5470
2- 5510-5560

Breking down(crossing 5380) will be 100% bear market confirmation and testing of following supports:-

1- 1st Support- 5349
2- 1st Strong Support Range-5210-5349.

Although Indicatiors started to show positive divergences in oversold zone but let down move stop and base formation start then any up move possibility will be considered. As supports at lower levels are strong therefore fresh distribution patterns are required to break supports.

Global cues are quiet today morning therefore Nifty will first hover around 5400 and prepare for next moves. As "Harami Bullish" candle yesterday therefore fresh selling today is must for breaking down yesterday range and fresh consolidation is also required to cross yesterday high therefore it is clear that Nifty will first prepare for next moves within yesterday range(5380-5437) and its break out will give next moves confirmations.

Better to watch break out 5380-5437 and get next immediate move confirmations.