Tuesday, May 13, 2008

To Fall or Not to Fall, That is the Question

The Nifty on back of strong global cues like good American markets and good Asian markets, though crude still remained a worry, opened up and continued its way up through the day. All remained well till the European markets opened. The European markets kept slipping because of lower first quarter earnings, inflation at the highest since 2002 (3%) and fears that the banks may be understating borrowing costs. The FTSE-100 lost almost 100 points during this time. Then a US report came out that Americans are still shopping more despite rising energy bills and a faltering labor market. This made the FTSE-100 rise 70 points to come back to yesterday’s levels thus recovering all its losses. The irony was that the Indian markets had closed before this report came out.


As seen on this 60 minutes chart of Nifty, the price has just reached its support level again. Whether it will find support here or not is difficult to say. It will all depend on the global cues early in the morning and by that time if we are already not below 4900 then a recovery may be possible. Resistance is near 5065 where it was found today as shown by the dashed trendline. The target below 4900 would be somewhere close to 4650.

At the time of writing of this edition, global cues were not very impressive. FTSE closed flat while the Dow was down about 75 points. A massive earthquake measuring 7.8 on the Richter scale in the Sichuan province of China left tens of thousands dead yesterday and a series of 7 serial bomb blasts rocked the pink city of Jaipur which left more than 50 dead and hundreds injured. While the earthquake was God’s wish and we have to accept what He wanted but the Jaipur blasts were an act of terrorism which I totally condemn. I’m sure God won’t even grant a place in Hell to those who were responsible. I wonder why these people don't follow Mahatma Gandhi's principles of non-violence which have proven to be so effective. Let us all pray for the souls of the departed.

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