Nifty Resistance @ 3100

The market today has opened flat with a bit of follow-up
selling. The Nifty is forming an inverted head-and-shoulder
pattern, which has a neckline at 3100. The pattern is now
on its way to forming its right shoulder, which has support
around 2850. On the daily charts, the index has strong
resistance at 20-DMA and 40-DMA, ie 3140 and 3470
respectively. The market breadth is positive with 710
advances and 415 declines. The daily momentum indicator
has given a positive crossover. On the daily charts, support
at 2850 and strong resistance at 3100 are indicated.


On the hourly charts, the momentum indicator has given
a negative crossover. We expect the momentum to be
negative for the day. Support at 2970 and a very strong
resistance at 3100 are indicated on the hourly charts.


Of the 30 stocks in the Sensex, State Bank (up 3.60%) and
Aban Offshore (up 5%) are the top gainers. 3i Infotech is
likely to test Rs53 on the upside and has strong support at
Rs43. Among the sectors, the banking sector has gained
momentum and is expected to move upward.