IFCI research, Watch Nifty : 28 Feb 2011

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Watch Nifty

Ø  Nifty made a reversal up as we had expected. Monday, 28th is a crucial day for a direction to the market. We are of the view that whatever the outcome, we are almost at the end of the downtrend. Two possible scenarios could emerge – Nifty could go below 5170-80 levels to touch 5050 or 4900 or could just re-test 5170 levels and start moving up. Timewise, however, as we had mentioned earlier, the downmove could last till March 15th to end March.  The bull run after the phase of correction could be protracted and there is a good chance of witnessing new highs. Banks and financials will lead from the front.

Ø  It is quite a brave and seemingly contrarian prediction of bullish scenario in the present context of all fundamental factors seemingly showing negativity like high inflation, zooming crude price, geopolitical instability etc. Our prognosis is purely based on our reading of charts which portends a clearing away of the worrying clouds. It may be recalled that we had earlier predicted a bull run in commodities which has materialised.

Ø  Nifty's support for 28/02 is likely around 5170-90 and resistance around 5380-5400.