Nifty short term out look 18th Oct 2011 (3 Months)

Nifty: Support 4960 – 4811 – 4585 Pivot 5040 Resistance 5187 – 5265 – 5492

Nifty: Looking at the chart Nifty is in formation of Bear Flag Pattern where it’s just reverted from the previous resistance level of 5156 and is trading at 5050 level. If we look at the Pole which started from the high of 5707 and tested the level of 4716 which was almost 1000 Points move, and there after it gave short bounce retracing just near to 50% of the fall where it failed to cross 5170 resistance level on closing basis. Recent rise which we have seen from 4723 point C to point D at 5156 indicate short term top is placed and is expected to test the level of lower support trend line at 4730 in near term. Further trading below 4730 – 4700 on closing basis will confirm the down trend where lower level gets open up. If we calculate the down side target after the break down taking 50 % of the Pole which comes to 500 points which will test 4800 level on lower side and 100 % fall which comes to 3700 on lower side. To be optimistic I am look Nifty to test 4200 as strong support and some consolidation move in lower band of 4200 to 4500 for few days and there after further trading below 4200 on weekly closing will bring to 4000 and 3700 in medium term. Stochastic which are trading in overbought zone has given negative intersection and is trading below 80% zone will bring it to lower level with fall in price what we are expecting it to test the level of 4200 in near term.