Laurence BalancoCLSA
Said, support for the Nifty stood between the 4,000 and 4,100 level. “That level is a key support that dates back to the lows we saw in 2007-08,” Balanco said. “It’s also the breakaway gap that we saw post the elections. I think we will see a pullback and a test of that level. However, I would expect that level to hold in the short term.”Looking at the Nifty, there is more risk towards the 4,090 level — that’s a key support level that dates back to the lows we saw in 2007-08. It’s also the breakaway gap that we saw post the elections, so the 4,000 level is an important psychological number. I think we will see a pullback and a test of that level. However, I would expect that level to hold in the short term.
I am looking at a re-tracement at this level, the key technical level sits at 875 and that level dates back to the January and February peaks and also the lows that we saw in May. So that’s quite a significant level to look at. As long as S&P holds that level, I would still look for a move up to the 1,000 mark before we see the risk of a pullback towards 800. As long as 875 holds, the potential up-move to 1,000 is still valid
The roadmap which we are looking towards the Nifty is the 4,200-4,100 area and the support level to hold and look for a retest of the peak — if not a move towards 5,000-5,500. India is one of the markets within Asia that we think has potential to at least take out new highs for the March lows. We have seen markets with similar structure like Taiwan, we have also seen that come back and follow up with a breakaway gap and we would look for those two markets to lead the recovery towards a new half or the March low. The key is that the S&P can hold 875, so those two markets look likely to retest the peaks at least.
source: MC
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