Markets for 20 aug 09

Again the critical level at 4350 to 4360 was protected by nifty in spite of dow future remaining 85 points negative during trading hours of indian markets. Markets continued to slide from the start but were highly volatile during the second half of the day. Most likely the the support around 4350 will be held as asian markets are ready for a good bounce on thursday.

For trading on thursday, critical level at 4430 will play a major role and if nifty is able to cross that level and sustain above it, then a sharp up move towards 4480 to 4490 can be seen. However failure to cross and sustain above 4430 can again pull down nifty towards retest of critical make or break level at 4350. Most likely 4350 will be protected this week after a minor breach to liquidate weaker hands.

Although daily indicators continue to become weak day by day, if one has a look at the hourly chart above, slow stochastic has bounced up from the lower zone indicating some up move on thursday. A +ve divergence in it also adds strength to nifty. As per short term andrew pitch fork indicator marked in blue, nifty has taken support at the lower fork and is ready for a bounce towards the median line. So, with ok asian cues in the morning, one can see a good bounce in nifty at least at the start to try to cross 4430 levels after which only further movement can be decided. Chinese index having slipped badly is ripe for a bounce so also hong kong index. However a big fall & a decisive breach of the make or break support at 4350 can signal a much bigger fall for nifty towards 4320 and then sub 4300 levels towards 4229 which may perhaps come next week
FOR INTRADAY TRADING ON THURSDAY, NSE INDEX HAS A VERY STRONG SUPPORT AROUND 4375 A BREACH OF WHICH MAY BRING IT DOWN TO 4355 TO 4350 WHICH SHOULD AGAIN SEE A GOOD BOUNCE. ON THE HIGHER SIDE 4412 IS THE FIRST HURDLE NIFTY HAS TO CROSS IN ORDER TO MOVE UP TOWARDS THE CRITICAL LEVEL AROUND 4430 THAT MAY SEE SOLID SHORT COVERING TO TAKE NIFTY UP TOWARDS PIVOT AT 4442 SUSTAINING ABOVE WHICH ONLY CAN TAKE NIFTY FURTHER UP TOWARDS 4464 OR EVEN TOWARDS WEDNESDAYS HIGH OF 4477 THAT MAY SEE SOLID PROFIT BOOKING. HAVING BEEN DECEIVED BY DECEPTIVE DOW FUTURES ON WEDNESDAY, ASIAN MARKETS MAY BOUNCE BACK WITH VENGEANCE ON THURSDAY.