Nifty has posted a positive weekly close

On Feb 11, 2010 Nifty has posted a positive weekly close, which clearly signals that this is a pullback of the fall from 5310 to 4675, which was a five-wave decline. From here, Nifty may test its 20 daily moving average (DMA), which is near 38.2% retracement level and this is also our short-term target. So, on a short-term basis the trend is up for the pullback, till 4748 holds and on the medium term the trend remains down. On the daily charts, the momentum indicator is in buy whereas on the weekly charts the indicator is in sell. This shows that the index is just retracing its fall, which again will be followed by an impulsive down-move. The strong resistance on the upside is at the 20 weekly exponential moving average (WEMA), hence the pullback can stretch to the maximum till the 20 WEMA.

On the daily chart, Nifty is trading below its 20 DMA and 40 daily exponential moving average (DEMA) pegged at 4941 and 4980 respectively, which are the near-term resistance. The momentum indicator (KST) has given a positive crossover and is trading below the zero line. The market breadth was positive with 799 advances and 492 declines on the NSE and 1,617 advances and 1,194 declines on the BSE.

On the hourly chart, Nifty is trading above its 20 hourly moving average (HMA) and 40 HMA placed at 4795 and 4775 respectively, which are now the short-term supports. The momentum indicator (KST) has given positive crossover and is trading above the zero line.

Nifty and Sensex were 70 and 230 points up respectively.