Eagle Eye April 10th , 07

The Nifty opened firm above the crucial 3775 resistance and continued to exhibit strength through the day. The index ended the session with gains of 91 points. The Nifty moved up smartly on substantial buying in front-line stocks and closed near the 3850 levels. The current upmove should continue and target the recent high around 3900 and the bias has changed from down to up after the Nifty sustained above the 10-DMA. After consolidating in the 3700-3775 range for the last couple of sessions the index has witnessed a breakout above 3775, which is positive for the market in the short term. Intra-day there are resistances at 3860 and 3880 and after the recent run-up the market could face selling pressure around these levels.
On the downside there is a support at 3820 and on a break below 3820 the next support is at the 10-DMA at 3775. On the daily chart the momentum indicator MACD is positive
but it is still trading below zero, which signifies that on any rise in the Nifty there will be selling pressure. Once the index sustains above the 3900 level and the MACD trades above zero there could be a further rise towards the 3950 level. With the Nifty closing above the 10-DMA the short-term bias has changed to up. On the intra-day or hourly charts the Nifty broke above 3775 and remained firm throughout the session. Though the index has witnessed a breakout, it would be prudent to wait for one more day for confirmation. We have changed our bias, but we would be checking for one more confirmation for validating the breakout. The momentum indicator RSI is overbought and on any further rise intraday the index could face selling pressure.
Sterlite should test Rs485 and it has a support at Rs470. TCS has a strong support at Rs1,200 and it faces a resistance at Rs1,230. Crompton Greaves is likely to
witness a bounce. The stock has a support at Rs196 and it faces a resistance at Rs211.