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Nifty has support at 4010: Nirmal Bang

Posted on: May 27th, 2009 and is filed under Brokerage Recommendations.

According to Nirmal Bang’s report,the next support is at 4010 from where we could witness buying interest in the frontline stocks. But if nifty fails to hold the level of 4010, then the next level could be 3860. “So remain cautious and trade according to the levels mentioned.”

Nirmal Bang’s report:

The benchmark indices at last broke the lower end support of 4160, which was the recent low of this entire rally. The Sensex
heavyweights were under selling pressure for quite some time as they were trading way above valuations. Today even the midcap & small cap indices witnessed huge profit booking and the broader indices broke eight days winning streak and declined over 3% each.

Now what we understand is that one should remain very cautious in the midcap stocks as the run up was quite significant in a short span of time. We could see further correction happening in the broader indices. Technically there is no signal that markets are topping out, but because the markets have rallied very sharply in a shorttime without any consolidation, a correction was due. The markets are slowly moving down but it has to consolidate and spend some time in the region of 3860-4000 levels before giving a fresh breakout in the June series. Looking at the current scenario we believe that buying should be avoided as nifty has broken and closed below the level of 4160. The next support is at 4010 from where we could witness buying interest in the frontline stocks. But if nifty fails to hold the level of 4010, then the next level could be 3860. “So remain cautious and trade according to the levels mentioned.”

Fresh buy only if Nifty maintains above 4160 level and major resistance point 4270.

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