Markets for 18 aug 09

Markets for 18 aug 09

the impact of heavy fall in asian markets that too with chinese markets falling by more than 6% saw indian markets crash to sub 4400 levels again threatening to re breach last wednesdays lows of 4360 . It looks as if chinese astrologers have got a hint of what is in store for the world markets in next couple of days. In fact they always act in advance. Now it looks as if the adverse planetary aspects have entangled u.s & other world markets completely that may continue to adversely impact world markets for next couple of days.

As per the daily eod chart above, nifty has again breached both 20 & 50 dmas which is not an encouraging sign for the near term. Another gap down fall below the critical level of 4350 levels can see nifty straight fall to 4229 or even lower levels. In case the support at 4350 breaks, it may give the confirmation signal that nifty is headed for the larger flat formation towards july 13 low of 3919.

On a decisive breach below 4350, nifty may fall to 50% fibonacci support at 4320 levels a decisive breach of which may take nifty towards 62% fibonacci levels of 4229 that will be the deciding point whether nifty can fall towards 3919 levels to complete the larger flat or bounce after the zigzag abc correction till 4310 or 4229 to see nifty resume its up move. In any case, most likely nifty should give a good rebound before another fall occurs. Important daily indicator slow stochastic is in a precarious position and another sharp fall in nifty will confirm the reversal of stochastic from present levels for a sharp fall. Other daily indicators like rsi, w%r & even adx trend indicator, have started to look extremely weak after mondays fall.

Generally it is seen that when asian & european markets fall badly due to highly negative dow futures which was 190 points down this after noon, after actual opening of u.s markets, dow generally changes gear to perform better the same night. So lets hope that dow lives up to its tradition that may bring cheers to asian as well as indian markets on tuesday morning. Actually indian markets & asian markets have discounted dows impending fall for monday night and have already corrected on monday in advance, hence one should not expect a bigger fall in indian markets on tuesday