There are certain technical developments that suggest bears are getting better grip with each short term downswing: between Apr 03 and Apr 07, the short term downswing (STD) wiped off 125 points of gain, next between Apr 10 and Apr 16 the STD recorded a fall of 154 points and the current STD that began on Apr 25 and still continuing, it has already posted a fall of 231 points in the Nifty. Look at it this way: each successive STD has been larger over the preceding one in both price and time. This is over and above the weekly chart that shows a rank negative formation at the top over the last three weeks prior to the current week—this raises a serious doubt about the prevailing optimism and the prospect of a major post poll results rally. Hope we are not in for some nasty surprises. Unless we close above 6719 today, the end-of-week chart of the Nifty would flash a strong sell signal in the index. Caveat emptor!
- Most critical levels for the day: 6670 – 6683
- Strong resistance: 6710 – 6719
- Major resistance: 6743 – 6759 and 6779 – 6783
- First support: 6643 – 6635
- Strong support: 6618 – 6603
- Major support: 6567 – 6548
Will the banks play the role of the sheet anchor in the midst of so widespread technical weakness signs? If it can pull off this difficult situation, it would be great! As we have been saying repeatedly that if there were to be a resumption of the erstwhile uptrend, the rally would be led by the banks. However, there are weakness signs even here as well-barring the SBI, most PSU banks are not that strong while chances of profit taking emerging is quite high if you look at the private banks' charts. Difficult situation indeed!
- Most critical levels for the day: 12984 – 12963, its immediate support range.
- Strong support: 12926 – 12904
- Major support: 12838 – 12797
- Strong resistance: 13095 – 13125 and 13176
- Major resistance: 13268 - 13395