Market Overview - CashTheChaos

Daily Outlook for Jan-09-2008

Nifty

NSE Nifty(6287.85): Both Sensex and Nifty scaled new highs but surrendered most of the gains to close mildly positive in another volatile session. The advance/decline painted a different story with decliners outnumbering the advancers by a 7 to 1 margin. Expect futher volatility going forward from here and unless one knows how to weed out the laggards from the outperfomers traders could get stuck in weak positions. The support for Nifty are at 6162 and 6090 and resistance is projected at 6490.

On a separate note, regular readers would know that we had pointed to the possible end of the bull market in the US on Nov 22nd 2007, when the Dow Jones went below its primary support. Yesterday's weak close in US markets has taken the broader S&P500 and small cap Russell 2000 below their primary support of 1400 and 725 respectively. Hence, in all probability the top in the US markets are in place. A fed rate cut of 50bps later this month at best may bring in a bear rally for the US markets.

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