Nifty Outlook For 20 Dec 2011

The Nifty opened below the Friday’s low in a shaven top (open and high was same for the day) candlestick formation, indicating weakness from the start of the day. Selling pressure intensified and it tested its lowest low in two years at 4,555.90 in early trades. The index managed to recover marginally to end down 38 points at 4,613.


 On daily charts, it ended in a “Hammer” like candlestick formation after a steady decline, indicating pull-back to continue in the near-term. Also, on hourly chart, RSI has turned up after testing oversold territory, reflecting strength at current levels. Any sustainable move above the high (4,623) of the hammer will confirm the pattern strength. Any move beyond 4,623 would lead Nifty to test 4,655 and 4,690. On the flipside, the low of the Hammer (4,555) may act as support in the near-term.