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Technical Research |

January 27, 2012

On Wednesday, markets opened on a higher note for thesecond consecutive session. After immense volatility onaccount of derivative expiry for the January series, Indicesmanaged to close marginally above 17000 / 5150 mark.On the sectoral front, Metal, PSU and Teck counters wereamong the major gainers, whereas Capital goods endedwith a marginal loss. The advance to decline ratio wasstrongly in favor of advancing counters. (A=1808 D=1040)(Source -www.bseindia.com)

Formation:

• We are witnessing a positive crossover on weekly “RSI – Smoothened” oscillator.• Indices are now trading above a “Downward SlopingTrend Line” joining July 8, 2011 high of 19132 / 5740 andOctober 20, 2011 high of 17908 / 5400• The 200-day SMA is now placed around 17356 / 5210level.

Trading strategy:

We witnessed a very volatile session on Wednesday due toderivative expiry. However, indices maintained their earlygains and managed to close above the “Downward SlopingTrend Line” resistance. Thus Indices are likely to test 200-day SMA placed around 17356 / 5210 level if they manageto sustain above Wednesday’s high of 17130 / 5174 level.However, we are now observing a “Narrow range body”formation on daily chart, which indicates an uncertaintyamong the bulls and the bears. Thus, if Wednesday’s low of17016 / 5130 is violated, then indices are likely to drifttowards 16846 / 5080 level.

Daily Technical ReportSensex (17077) / NIFTY (5158)

Exhibit 1: Nifty Daily Chart

Source: Falcon

Actionable points:

View BearishSell Only below 5130Expected target 5080 – 5050Resistance levels 5174 - 5210

Technical Research |

January 27, 2012

For Private Circulation Only|

On Wednesday, Bank Nifty opened on a flat note andtraded with immense volatility to close marginally below theinitial opening level. Similar to the benchmark indices, weare now witnessing a narrow range body formation on thedaily charts, which is a sign of indecision prevailing atcurrent levels. Therefore, if the index manages to sustainabove Wednesday’s high of 9906 then it is likely to test9967 – 10017 levels. At present, the momentum indicatorssuggest that the Index is in an overbought condition and asmall correction cannot be ruled out. In such a scenario, ifBank Nifty sustains below Wednesday’s low of 9762 then itis likely to test 9680 – 9550 levels.

Actionable points:

View

Positive Above 9906

Expected TargetSupport Levels

9967 - 100179760 – 9680 - 9550View

Negative Below 9760

Expected TargetResistance Levels

9680 - 95509906 – 9967 - 10017

Bank Nifty Outlook -

(9857)

Exhibit 2: Bank Nifty Daily Chart

Source: Falcon