Index making a broadening pattern: The Nifty has made a broadening pattern over the last two months. It has now bounced off the lower support line of the pattern on two occassions. A break below this pattern can possess the potential to cause very serious damage to the trend. The lower level is indicated around 5750 - 5700.

Short / medium term momentum is oversold: The short / medium term oscillator (Slow Stochastics) has started moving up again after a slight drop. The position of the indicator points to a recovery in the offing. The extent of the recovery however, cannot be ascertained.

Outlook: The trend in Nifty is again attempting a recovery from a drop in values. This is suggesting a short term rally in the offing to about 6050 where there is significant resistance. However, the overall trend may be betraying weakness and a move below 5700 should be seen with alarm. A move above 6100 can help the Nifty recover further. For now, we see the Nifty ranging between 5750 - 6050.

Bouncing off 200 DMA: The index fell to its 200 Day EMA again after a tame attempt at rising. The trend seems to be getting support at this level and has retraced some of its fall. Another attempt at rising can be expected. However, the overall behaviour does not exude strength and confidence.

Momentum: We have used a Slow Stochastics indicator to understand the trend. The trend has bounced after this indicator reached its oversold zone. This indicator turned down, but has again moved up. An advance of a minor nature can develop again.

Outlook: The Midcap index has been bouncy of late. This is as per our expectation in the previous issue. This nature can cause another advance of at least a minor nature in the coming days. The 200 DMA remains a support structure for the trend at present. The medium term trend (not drawn here) however, is indicating weak technicals. A repetition of such behaviour can, however, weaken the structure as indicated by its medium term technicals.