Market Outlook 02/07/08

Bounce from low possible today and crash from high levels again..!

It was a horrifying day of fall for indian stock market yesterday and more surprisingly nifty broke 4000-which was a very strong support very easily and this indicates the manipulation at very strong hands and nifty made a low below 3900 in yesterday's trade..as it reached a low of 3878.....! The Dow Jones industrial average, down more than 150 points earlier, rose 32.25 to 11,382.26 and crude Oil settled at a new record of $140.97 a barrel on the New York Mercantile Exchange after rising above $143 a barrel earlier as worries about tight supply and mounting tensions in the Middle East continued.The economy which is still weak due to soaring commodities prices and the credit crisis is not showing any positive signs of strong pull back.Indian political situations are also not good at this point of time.For today, nifty above 3900 will move towards 3945 resistance where heavy selling is expected again and if nifty gets past 3945, chances of testing 4000 is strong.Higher levels will face selling and on downside, nifty below 3900 has strong support at 3860 and break below will create panic again and nifty will drop to 3840 and 3800 then

Stock watch for the day:

Nalco (350): Buy this stock with stop loss 342 for target 360.If moves below 342, it is not a buy.