Target Achieved.....Nifty Touches 4800 level on 19th August 2011

The target given for the Nifty on 9th August was achieved on 19th August. The Nifty now should find support at 4770-4780 which is a crucial resistance for the Nifty as it is 38.2% retracement from the lows of Oct2008 (2252) to the highs of (6338) on Nov 2010.Incidentally this is also 50 month moving average for nifty.

The Nifty here looks deep oversold one should wait for a meaning full bounce back before creating any fresh long positions. The Nifty will bounce back to cover the window it created with a Gap down opening on Friday, which will 4940 levels, this could act as an immediate resistance for the Nifty, after this Gap, Nifty will face another resistance at 5323 levels, however the possibility is more that the Nifty could reverse downwards once again from 5000 levels as the market sentiments looks quiet weak.

In Nutshell it would be advisable to take each resistance at a time,  before going long on Nifty....once Nifty crosses 5000 levels one can go Short on Nifty at 5100-5150 levels with a Stop loss of 5323 on a closing basis.