Tuesday, December 2, 2008

02 Dec'08: Nose Dive

Yesterday nifty opened positive and in the first half of the session it had tested the critical 50% retracement level of 2832 exactly beyond which it could not move. Nifty did tried to break that level couple of times and failed badly to fall in a nose dive fashion in the second half of the session where there was no turning back. From the day’s high nifty fell almost 5-6% and closed near the day’s low which has brought weakness in the daily charts and can trigger further downward movement. Compared to the Asian peers Europe market sold off heavily yesterday where their indices drop to around 5-6%.

There was a one more massive sell off in the US market which resulted in their indices loosing around 7-9% in a single session. Asian markets also have opened and trading weakly. In continuation of yesterday Nifty is expected to open weak and most possibly with a gap down.

On the upper side nifty may find resistance near 2755 or 2839 levels. Similarly on the lower side support exists near 2624 or 2540 levels. Don’t be surprised if the first support level is taken out in the opening itself. Intraday surprises may be anticipated for the day.

Happy Trading !

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