19JAN TO 23JAN 2009

There is no separate out look for India this week.

All the markets around the world are looking towards the U.S. markets -especially the DOW for a clue next week. Will there be an Obama rally or not? If we get a boost at current levels from this hope then this could be a turning point for medium term where we would have put in place a bottom at November lows and also get propelled beyond the recent peaks that are acting as formidable resistances.

U.S. DOW(8281): The hope of Obama rally could have helped this index to close above 8000 consistently, but the breach of 8000 implies that it needs to move lower in the medium term once again. There is a lot of talk about having found a bottom for this bear market and if it could rally from current levels then it has main resistance is at 8563 this week. Go long above here for target of 9175. But inability to close above 8400 soon will pull it down below 8000 and towards the lows of Nov 2008.

U.K. FTSE100(4147): Inability to close above 4315 early next week would be a cue to remain short for lower targets of 3800 in short to medium term. Resistance above 4300 levels would be 4385. Go long above 4385 for targets of 4650. But momentum indicators are lurking in the negative zone, similar to the DOW, which is a sign of continued downtrend.

JAPAN NIKKEI(8230): Inability to close above 8500 early next week would be a cue to go short for lower targets of 7600 in short to medium term. Resistance above 8500 would be at 8660. Go long above 8660 for targets of 9500 levels. Momentum indicators on this chart also are in the negative territory, implying that it could also trend according to world markets only and not on its own.

CHINA SHANGHAI(1954): This index seems to have started trending up contrary to the world trend. Momentum indicators are also in the positive territory and trending up. Volume has picked up, signalling the interest of investors in this market. Some world participants could have started buying into this most talked about emerging market besides India. Yet, it would have to surpass the resistance at 2100 levels to prove this. Immediate support is at 1880-1920 band.

INDIA BSE SENSEX(9324): Inability to close above the levels of 9510 soon would be a cue to remain short and exit short term longs. Go long only on a close above 9850. On the other hand, a close below 9000 would imply continued weakness and then the index could trend lower towards the previous lows in short to medium term. Supports on the way down would be at 8500 and 8300 levels.