PRE-OPEN MARKET OUTLOOK(20-05-2009)

INDIAN MARKETS CLOSED FLAT YESTERDAY AND DAILY CHART IS SHOWING DOJI FORMATION WITH GOOD VOLUMES.INDIAN MARKET BOTTOMED OUT ON 27-10-2009 AND MADE THE HIGHEST OF 4509 YESTERDAY.NIFTY GAINED 2256 POINTS IN THIS JOURNEY AND AFTER CROSSING 5 MONTHS RANGE ONLY SHORT TERM CORRECTIONS WERE SEEN.IT IS THE STRENGTH OF THIS RALLY THAT ACHUAL RALLY STARTED ON 09-03-2009 AND SINCE THEN 5 GAPS SEEN IN CURRECT RALLY. IT IS ALSO REMARKABLE THAT NO GAP WAS FILLED AND 4 SHORT TERM CORRECTIONS WERE ONLY RANGE BOUND.ALL THESE ARE SHOWING THAT CURRENT RALLY IS HAVING GOOD STRENGTH.NOW INDIAN MARKETS ARE FACING STRONG RESISTANCE WHICH IS BETWEEN 4350-4620.ALTHOUGH INDIAN MARKETS DID NOT SUSTAINED AT HIGHER LEVELS AND CLOSED A LITTLE ABOVE THE LOWEST OF DAY'S TRADING RANGE.IT IS CONFIRM THAT INDIAN MARKETS REQUIRE GOOD CONSOLIDATION TO CROSS THE STRONG RESISTANCE RANGE(4350-4620) AND THIS RESISTANCE WILL NOT BE CLEARED EASILY.COMING SESSIONS WILL DECIDE;-

1- MARKETS ARE CONSOLIDATING OR,
2- PREPARING FOR SHORT TERM CORRECTION OR,
3- AS INTERMEDIATE TERM CORRECTION IS ALSO DUE THEREFORE PREPARING FOR IT.
IN THE SITUATION OF CONSOLIDATION MARKETS WILL TRADE ALMOST WITHIN YESTERDAY RANGE AND WILL NOT MOVE DOWN TOO MUCH FROM YESTERDAY RANGE.FOR SHORT AND INTERMEDIATE TERM CORRECTION FOLLOW UP SELLING IS MUST. IF FOLLOW UP SELLINg COMES TODAY THEN SHORT TERM CORRECTION WILL CONFIRM AND INTERMEDIATE TERM CORRECTION POSSIBILITIES WILL INCREASE. INTERMEDIATE TERM WILL MEAN TERMINATION OF 1ST WAVE AND BEGINING OF 2ND WAVE.IN THAT SITUATION INDIAN MARKETS WILL CORRECT WHOLE OF THE 1ST WAVE MOVE.ALTHOUGH SHARP RISE SEEN IN SHORT TERM BUT INDIAN MARKETS ARE NOT PREPARED AT THIS MOMENT FOR INTERMEDIATE TERM CORRECTION AND SOME MORE SELLING REQUIRED ON INTRADAY BASIS AND MORE SELLING PATTERNS REQUIRED ON EOD CHARTS.AS PER MY VIEW COMING COUPLE OF SESSIONS WILL CONFIRM FORM OF CORRECTION.

EUROPEAN MARKETS CLOSED IN GEEN AND US MARKETS CLOSED FLAT YESTERDAY BUT INTRADAY CHARTS OF BOTH MARKETS ARE SHOWING GENUINE SELLING THEREFORE MORE DOWN MOVES WILL BE SEEN IN US AND EUROPEAN MARKETS AND THAT WILL IMPACT SENTIMENT OF GLOBAL MARKETS AND SOME DOWN MOVES WILL BE SEEN IN GLOBAL MARKETS. AFTER YESTERDAY SELLING SOME MORE DOWN MOVES MAY BE SEEN IN INDIAN MARKETS BECAUSE GLOBAL CUES WILL ALSO LAY ITS IMPACT ON INDIAN MARKETS.

INDIAN MARKETS WILL OPEN WEAK TODAY AND TODAY INTRADAY MOVES WILL GIVE INDICATION OF FORM OF CORRECTION(SHORT TERM OR INTERMEDIATE TERM).

(LALIT KUMAR DHINGRA)