Report - for Monday 3rd

ANTICIPATED HIGHS – LOWS FOR THE WEEK:

	NIFTY FUTURES	SENSEX
HIGHS	5,217.00 – 5,220.00	17,667.78 – 17,734.19
LOWS	5,018.35 – 5,052.00	17,137.99 – 17,258.20
	(Pessimistic 4,746.35)	(Pessimistic 16,457.74)

PRESENT STATUS OF THE MARKET AND FUTURE ANTICIPATION:

Budget has not changed ‘Intermediate Trend’ – it continues to be down while in its 07th week ; if we look at monthly candles of Nifty Futures & Senses we find ‘Doji like patterns’ in both with slight (but all important) variation – while Sensex has closed below closing of preceding month and opening of Feb’08 giving bearish indication at least for the first half of March’08, Nifty Futures monthly candle is showing closing above closing of Jan’08 as well as opening of Feb’08 giving indication of support at declines in March’08 ; another point worth noting is monthly bars of Feb’08 of both indices are showing ‘Inside Bar’ formations which means whichever direction these will breakout in present month from highs / lows of last month, immediate movement will be in that direction. Looking behind at much larger time frame we find that there have been 2 long term corrections (lasting more than 12 months) in Indian market since 1979 (earliest record we have in our systems) when Sensex has corrected more than 50% from highs – those 2 falls were post H.M. scan and post K.P. scan – first one lasted 13 months and corrected 56.45% from high of 4,546.58 in beginning April 1992 to low of 1,980.06 in end April 1993 and second one last 19.50 months and corrected similarly 57.81% from high of 6,150.69 in mid Feb’2000 to end Sept. 2001 – now one can ask as to why are we mentioning these 2 examples at present juncture as there has been ‘no scan presently but what is really striking is the distance between major peaks of April 1992, Feb 2000, and 2008 – IT IS EXACTLY 94.50 MONTHS (or roughly 8 years) – now do we think that fall of greater than 50% amplitude and more than 12 months duration can occur at present juncture – most probably not looking at average growth rate of our GDP over last 4-5 years which is nearly triple than preceding 5 years average and which, is more than quadruple of Hindu Growth Rate which used to be the norms during ‘first scan’, surely presently for last 3 quarters growth is slowing down and till next general election it seems that there is not going to be much reduction in interest rates as inflation needs to be brought under control in short term, keeping this short term scenario in mind and keeping in mind that present government wants to go ahead with Nuclear Accord with U.S. (for which time is running out) even at the cost of making left angry resulting in before time next general elections and keeping in mind how our markets behaved few months prior to last general elections (there was a fall of 5 months bottoming in the month of formation of ‘Khichrhee’ government) we anticipate present intermediate down move should similarly continue in a zig-zag manner till formation of next government (which most probably should be before Jan’2009 as per our own calculation) ; it could be that present ‘Intermediate down move’ (let us call it Wave A) passes time in zig-zag manner till April – May 2008 and then a good rally of few weeks (let us call it Wave B) which will end much lower than the highs of this year and then finally Wave C down which will end at the time of next general elections results (or around that time) and from there at least 4 years rise ending in 2012-2013 (amplitude of rise depending upon amplitude of international economic slow down & Indian GDP growth still being maintained in 8-9% annual range).

Coming to the other side of the story – only if indices close any day above 5,356.27 & 18,216.64 with white candles then minimum up targets would be 5,553.90 & 18,895.34 and intermediate trend will give indication of going to other side (subject to other confirmations at that time) if indices close at any weekend above 5,736.74 & 19,237.90 if during present month indices do not go below 4,746.35 & 16,457.74 and close with white candles above 5,181.10 & 17,578.72 then April 2008 should be bullish.

Coming to detailed anticipation for this week and this month – generally within first couple of days in this week light support should emerge in ranges 5,018.35 – 5,052.00 & 17,137.99 – 17,258.20 and on rally later profit booking should emerge in ranges 5,217.00 – 5,220.00 and 17,667.78 – 17,734.19 but if on Monday indices close below 5,018.35 & 17,137.99 then lows of this week should be 4,908.90 & 16,949.14; coming to the month anticipation - generally in this month support should come within first 2 weeks in ranges 4,746.35 – 5,043.23 & 16,457.74 – 17,031.22 and then these should take rally to levels 5,356.27 – 5,367.50 & 18,216.64 – 18,237.02 where heavy profit booking should develop ; only in indices close this month with white candles above 5,181.10 and 17,578.72 can one think of bullish April 2008, not otherwise.

TODAY'S TREND:
SIDEWAYS

----- With due apologies and full credits to Kalpataru