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We have witnessed three range bound days after a falling streak of nine days. Now, it would seem difficult for the markets to regain their lost trend, but not impossible. Today a possible  increase in volatility can be expected, post the announcement of IIP numbers. Indices are already in a downtrend as indicated in last few days and a bearish trend is likely once it sustains below 5500.

There are three possibilities likely from the current levels as mentioned under.

1. There could be the next leg of a downtrend if Nifty future breaks below 5500 & does not recover.

2. There will be an upward move if Nifty futures manages to breach 5625 as there will be a very aggressive unwinding of short positions.

3. In the event that markets fall below 5500, it can find support & can bounce from 5400 & 18000 as these are extremely strong support levels which will probably not be broken easily.

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Written by Rakesh Gandhi

May 13, 2011 at 1:40 pm

Posted in Market Watch

Tagged with , , ,

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