Nifty declined below the 3800 level on Monday and recorded a trough at 3198.9 on Friday, way below our outermost medium-term target. Though we were anticipating a decline, the swiftness definitely took us by surprise. The supports on the long-term charts for the Nifty are now at 2940 (61.8 per cent retracement of the up-move from 2001) and then at 2595 (June 2006 trough). The medium term outlook will turn positive only on a weekly close above 3800.
Near term resistances would be at 3530 and 3610. Reversal below these levels will indicate further weakness. Subsequent resistance is at 3879.
RSI-2
