Nifty recorded the peak at 6181 on Monday before ending the week 230 points lower. The short-term trend in the index is down and it will face resistance at 5998 and 6068 in the days ahead. Traders can initiate fresh shorts if the index fails to rally beyond the first resistance. Downward targets would be 5801 and 5721 for the short-term.
The medium-term downtrend from the 6335 peak appears to be continuing in the Nifty and this leg of the down move has the targets of 5801, 5567 and 5332 over the medium term. It however needs to be borne in mind that the index receives strong support in the zone between 5700 and 5800 from where a rebound is possible.
A strong close above 6068 will negate the bearish medium-term view and take the Nifty to 6167 or 6343 in the upcoming sessions.
Global CuesGlobal markets have ended the first week of 2011 on a mildly positive note. There were no runaway rallies in any market but most benchmarks managed to close in the green. CBOE Volatility Index closed a tad lower at 17.4 indicating a status quo as far as investor sentiment is concerned. As we have written earlier, a strong close below 15 in this index will imply that global stocks are in a raging bull market.
But the VIX reversed higher from this level in the last week of December.
The Dow closed on a very strong note, up 119 points last week. Medium-term targets for this index remain at 11,867, 12,000 or 12,444. Close below 11,450 is required to make the near-term outlook negative for Dow.
Many of the Asian benchmarks such as Hang Seng, Karachi 100, Malaysia's KLSE Composite, Nikkei, Seoul Composite, Straits Times Index and so on put up a strong performance last week.
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