Morning update for 04 aug 09

The historical bullish first day of august as well as first monday of august saw entire world markets under bullish momentum with dow rising by 114 points and more importantly s&p500 crossing and closing above 1000 mark. Remember, there are many more days of up moves in store for dow in coming days. European markets closed up by 1.5% to 2% with uk ftse closing up by 1.6%. Asian markets have opened strongly and are likely to enjoy the on going bull run and are likely to shoot up further.

For indian markets expect a strong +ve opening, most likely around or above the initial resistance of 4747 to 4750 nifty levels. Although there will be bouts of intraday profit booking, intraday traders must use these intraday corrections towards 4700 or 4670 levels to buy for good gains. If everything moves as they are now for next 2 to 3 days, then expect nifty most likely to test 4900 levels by end of the week.

Since nifty has already moved up for 3 days in a row, there is a possibility of a day or two of pause. But, a white candle on thursday, followed by a perfect doji star on friday that was followed by another strong white candle generally shows continuation of the on going momentum. Secondly 2 dojis on 27th & 28th july with their top around 4600 has been decisively breached that should take nifty higher by at least an amount equal to distance of about 220 points which is the distance from the highs of these two dojis from the previous swing low of 4380 on 22 july. So, every intraday correction may be bought into for target of at least 4818, till such time a cooked up story is planted to bring down the markets to enable big players to re enter after booking profit at the higher levels