INDIA: PREMARKET OUTLOOK: 6MAY 2009

(Please click on chart to enlarge)

NIFTY

Is there more steam left in the markets?  The sentiment suggests so.  But for the moment it has found resistance at 3680.  In other words, the chart pattern suggests that it could trend sideways with positive bias for a few more days.  But a move above current levels would take it towards 3900 in the days ahead. 

Existing short term long positions may hold with stop at 3555.  No fresh short term long positions below this mark on closing basis.  Medium term traders can buy on declines around 3517 and 3478 with the second support being as stop loss mark.

Immediate resistance remains in the 3700 area.

SENSEX

Similarly, the SENSEX  also has one more target at 12900 to be achieved.  But the index has found resistance at 12200 zone.  The chart pattern suggest a sideways mode in the offing.  But the sentiment is still upbeat. At the same time, a correction is also due in Indian marikets and RSI is pointing towards that.  To sum it up, there could be one more upsurge after little consolidation at current levels before a correction takes place.

Existing short term long positions may hold until support 11725.  Desist from initiating fresh longs on a close below here.  However, the medium term traders can buy around 11725 and 11434 with second support as stoploss on closing basis.

Disclaimer: It is not an invitation to trade in the markets.  Use your own discretion as it also involves financial losses.