Nifty Weekly Outlook (07th to 11th June 2010)

Last Week ending on Friday (04^th June 2010) NIFTY gained almost 1.40% and closed at 5135.50 as compared to the last week’s closing of 5066.55. Since last two weeks Markets are totally news driven. Last week, markets enjoyed the announcement of good GDP Numbers for the first quarter, but couldn’t sustain due to negative global cues. Slowing of Chinese economy growth, along with the deep crisis in Europe added to the jitters and NIFTY made a low of 4961.05 for the week. NIFTY is taking strong support at its 40-Days EMA of 4935.98. Now if in the next week NIFTY closes below this level, it will call for a Major Correction in the Markets, which may drag it to the levels of 4700 too.  

On Friday, after the close of Indian Markets, all other global markets had a bloodbath, were down about 2-3% on the announcement made by the new government of Hungary about its debt crisis. Euro Currency continued to make its 4-year low and also the disappointing US Job Data added to the jitters on Friday Night. For the next week, more important decisions are to be announced on the Global front. China will be announcing its Inflation numbers and will also have a decision on the Interest Rates. With the ongoing negative news flow in the markets around the globe, a good selling pressure is expected to come in the coming weeks.

On the Weekly Charts too, RSI (Relative Strength Index) is making a negative crossover. Hence traders are suggested to trade cautiously by following Strict Stop Losses and avoid making fresh investments at this point of time.

For the next week, the level of 5225 will act as an important resistance, whereas the level of 4785 will act as an important support for NIFTY.