Markets for 25 aug 09

The markets did more than it was expected out of them. Nifty has decisively crossed both 50 dma at 4400 & now 20 dma at 4537 and also on monday it breached and closed above 4619,the b wave of the abc correction from the high of 4731 till the low of 4353.generally when the upward thrust crosses the top of the b wave of the previous correction it generally moves up to shoot past the previous high as a new up wave. So with a little bit of pause here & there one should generally expect nifty to shoot past the 4th aug high of 4731 to much higher levels in coming days with the expiry posing as a minor hindrance to the up move past 4731.

As per pure technicals, the markets look extremely bullish having closed above the neck line of the larger w formation with the base around 4350 levels and neck line around 4619 levels which over a period of couple of days should take nifty up by 270 points from the neck line towards 4890 levels if not before te expiry, certainly within a few days after the expiry. The neck line around 4620 levels will now be a support to invite buying interest. The 3 months of flat type consolidation after the election verdict spurt looks to be over and in all probabilities one can see nifty testing 5000 levels in september. With andrews pitch fork median line moving up day by day , it will attract nifty towards it now around 4700+ levels very soon and if things things move as they are now, purely based on technicals, one should not be surprised to see an expiry around 4700+ levels on the coming thursday

FOR INTRADAY TRADING ON TUESDAY, NIFTY HAS STRONG SUPPORT AROUND 4600 TO 4590 LEVELS THAT MAY INVITE GOOD BUYING INTEREST. ON THE HIGHER SIDE, IT MAY FIND INITIAL RESISTANCE AROUND MONDAYS HIGH OF 4656 & THEN 4680 LEVELS, ABOVE WHICH IT MAY JUST TRY TO SNEAK INTO 4700 LEVELS THAT MAY INVITE HEAVY PROFIT BOOKING. US MARKETS AFTER 4 CONSECUTIVE DAYS OF RISE HAS PAUSED FOR A DAY OR TWO TO SHOOT UP AGAIN AFTER THE PAUSE.