MARKET vIEWS fOR 18-02-2008

Hi Friends,
The week that wasn't.This should be the term which should be used for our markets.I have a strongly belief that we might see a Pre Budget rally unfolding itself.The strength of my recommendation lies in the Technicals of the Nifty.Markets pierced the 200 dma twice before sharply recovering from the same.In may 2005 markets started crashing from may 5 -9th of june.Markets recovered on the 6th week after piercing the 200 dma on the downside and saw a smart recovery on the 6th week itself.We never saw those levels of 2589-2900 in Nifty again.Similarity can be found in the june 14th crash patterns.Markets slid in a similar way for five consecutive weeks before recovering on the sixth week ending august 24th,2007.Those levels of 4040-4263 was not pierced even in this bear run.I should not call it a bull market correction as bears were visible throughout the street and many real life Bulls suffered huge losses in this crash.
The next technical trigger is that the MACD is showing positive divergence and the rsi is also showing a positive divergence.All said and done let me remind traders accuracy of technicals is a probability which is not always unity.My view will be vindicated if nifty breaks 200 dma for the third time or if it sees the levels it touched in last major fall ending august 24,2007.Even a Fibonacci based retracement levels in beaten down stock will show a 20-30% rise in small cap value stocks.I will advise trades to trade with sl in any speculative counters.Do remember that after 1 moving average resistance is at next moving average.So we have resistance now at 5395 levels.

Index Views - 18.02.2008.

Nifty has managed to remain above 200 DMA (4910) for continous two days, which shows that the selling pressure has come to a decline. If Nifty manages to stay above 5300 then we can see fresh set of rally in nifty index. It's advisalbe not short nifty as far as nifty stays above 5300 levels.

If nifty fails to remain above the 200 DMA levels then its possible that we may see 4400 (previous levels). So watchout for the levels on NIFTY.