Staring at 61% retracement level.

I am wondering if the the unlimited soft-drink refills at Taco-Bell [Mantri Square] had anything to do with my viral fever + cold + cough. Last few days have been terrible - both [my] health and markets :).

Tomorrow is the F&O[Futures and Options] closing [last thursday of the month.]. We saw a huge sell-off this month from Nifty ~5400 to now 4917. Somehow it doesn't seem like the market is going up because of short covering. Even on a day like today [Nifty ended +2.3%] FII had a net trade of -166 cr. I have not seen a single day in the last 2 weeks with +ve net trade from the FII's. Seeing the way rupee has lost ground, now ~47[for $1], money seems to be going out of India.

With all the problems in Europe, it should be a great time to invest in India. And there have been a lot of supporting developments too, for example: Government making 67K cr from 3G spectrum bidding [+ve for GDP and -ve for Telecom[how are these guys going to pay back :-?]], Ambani brothers truce, Monsoon's almost perfect [yet to be out]. Also the strong quarterly results of the Indian companies makes me believe this is an excellent opportunity to invest atleast 1/3rd of the investment amount.

I believe Banking is very important sector of Nifty. If this sector moves, it will carry with it a lot of other sectors.

From the chart above, it seems that BNF has taken support at the 61.8% level from the Feb 2010 lows. We will have to wait and watch the effect of the "Triple top"[with the base at 38.2% retracement level] as well, which has a target of ~8600 levels.

I hope we will not have to see BNF below ~8600 and NF below ~4700[23% retracement from 2009 lows]. If it does, I have no idea of the next targets. We will have to just wait for the markets to show the direction.

-Sri