12 Dec'08: Over Bought

Yesterday nifty opened with a mild positive note. During the first half of the session nifty was trading in the negative terrain and very often tried to move into the positive side and failed. Also on the lower side nifty defended the 2900 level by sharply bouncing back. In the second half of the session nifty saw the selling pressure and sharply dived till the day’s low of 2861. The last hour of trading was marked with surprise like that of last session where nifty saw a very sharp pull back and closed almost flat. The last hour pull back was contributed by major heavy weights like Reliance Industries, etc. IT sector was hammered during the session. The Nifty high, low & close are as follows:

H: 2945          L: 2861           C: 2920

 

US market closed in negative with their indices loosing around 2-4% in the last hour of trading. Asian markets also have opened and trading in negative region. Nifty is expected to open with a negative bias. Inflation has been reported 8% against the previous value of 8.4%.

 

On the upper side nifty may find resistance near 2956 or 2993 levels. Similarly on the lower side support exists near 2873 or 2825 levels. If nifty can manage to break and stay above the first resistance level it may add more momentum to the nifty towards 3000 levels. Since nifty has entered the overbought level, correction may be expected in any time.

 

Happy Trading !