NIFTY is at a do-or-die level and standing on a cliff. As seen from the chart, the low on Friday was bang on the trend line right from the March 2009 lows, from where this rally began.
Bulls have a huge task on their hands right now, and they will try to protect this level with all their might. Interestingly, 2 main index heavy weights – Reliance Industries and SBI are also poised at extremely critical levels.
NIFTY has to cross a big hurdle at 5000 – 5010 first and then close above 5040 to ensure safety of the uptrend.
The DOW has helped on Friday night by closing above an important level, and NASDAQ has a logical target of 2215 (2139 now).
After having done all the hard work over the last 7 months, Nifty needs to protect Friday lows on a closing basis, to head for the logical targets of 5175 – 5250 – 5295 and finally 5545.
The Vidhan Sabha elections in Maharashtra will not help bulls, since a holiday in between with global markets working, leaves our markets vulnerable for a gap down.
Keeping all this in mind, Nifty needs to close ABOVE 5040 tomorrow. If it fails, traders would be advised to remain light before the holiday and take a fresh look on Wednesday.
It was quite a forgettable DIWALI for bulls in 2008. Will they make it sweet in 2009? The next few days will have an answer to this question. Watch RIL and SBI over the next few hours.
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