Crucial Trendline is broken, And it is likely to offer Resistance, 5 August 2010

The Trendline which was drawn from the May low of 4786, was already broken by the Nifty. But, Nifty is still showing some strength upside. Since the crucial trendline has already broken in the downside, it can be assumed that Nifty is likely to top out in the near future.

Break of trendlines not always followed by sharp trend reversal. Some times it would be followed by a weak rally. In this type of break out, now the same trendline would act as resistance in the upside. Unless, Nifty once again moves above this trendline in another 2 or 3 trading sessions, Nifty is likely to see a sharp correction in the downwards.

Nifty Technical Outlook, Positional & Intraday Trading Levels, calls, and tips, 5 August 2010

Today, 5455 is the crucial intraday level for Nifty.

If Nifty sustains below 5455, then it could test 5410 and below that level it could test 5360.

Instead, if Nifty trades above 5450, then it could test 5500 and above that level it could test 5550.

Short term Technical View of Nifty

For the short term, the level 5550 is crucial. If it sustains below this level, then it is likely to test 5100. Instead, if it trades above 5550, then it is likely to test 5650. 

Medium term outlook of Nifty dated on 30 July 2010

The medium term outlook of Nifty would remain bearish if it fails to sustain above 5550. Nifty is likely to see a medium correction from 5550 and it is likely to be in correction mode for another 1 year.

Long term outlook of Nifty dated on 30 July 2010

The long term outlook of Nifty is looking bearish and the present bull market from the low of 2003 is likely to terminate in 2010 around 5550 and it is likely to followed by 2 to 3 years bear market.

Reality, Power, and Infrastructure sector is likely to underperform the overall market. FMCG, Pharma, and Banking sectors are likely to perform better in coming years.