NIFTY Weekly Technicals.

>> Sunday, March 29, 2009

Last week we saw NIFTY was in a bullish mode. A good uptrend was seen.
Last week NIFTY closed at 2807 and this week at 3108 an increase of 300 points odd. A good one. 
The week was followed with good global cues.
NIFTY TRIN at 1.424
Over all Nifty is mixed.

Support - 2990 and 2918
Resistance - 3140 and 3240
Reversal from either of these levels would provide the opportunity to initiate fresh short positions. (Resistance)

Though the Sensex is below its November 2008 and January 2009 peaks, Nifty has already reached these resistance levels that lie between 3140 and 3240. 38.2 per cent retracement of the recent leg of the down-move also gives us the resistance at 3200.

We have also been reiterating that the upper end of the medium-term trading range in the Nifty is around 3200.

In other words, Nifty is at decisive level.

A strong break above the 3240 level will mean that the index is in a strong counter-trend rally that can take it higher to 3500 or even 3800.

However, a reversal from the 3200 level can drag it lower to 2500 again. Short-term supports are at 2990 and 2918. Fresh longs should be avoided on a decline below the first support.

Medium-term investors can stay sanguine as long as the index holds above 2800.