Technical View

As the last chart suggested on 10 May 08 ,Nifty broken 4900 support and Market trend turned down with first target of 4640 .In the journey towards 4640 Market is likely to get bounces from lower channel line. 1st Bounce witnessed yesterday (27 May 08) which can take the market maximum up to 5000-5020 levels which is the upper channel line. Then there could be 2 possibilities :-

Scenario 1
Since NIFTY is making lower bottoms lower tops ,which is a bearish sign ,that's why the trend said to be DOWN .
So If Nifty Closes above 5050 it will face Major resistance at 5150 which is the last Lower Top. If it breaks 5150 convincingly and closes above it , that would be a TREND REVERSAL .

Scenario 2
Since scenario 1 is very unlikely under current fundamental scenario , it is very likely that after touching the upper channel of around 5000-5020 or before touching it , Market can continue its downward journey till its meet lower channel line again at 4770-4800 range. That level again we may get a bounce.

 28th of May 2008          Research Team - IICM

Fundamental Analysis

Last quarter results were satisfactory. Its a global scenario ,crude oil prices ,economy slow downs and Inflation which all are dragging the markets down. There is another fear of interest rates going up. So all together fundamentally everything is against the bulls. These factors can be slowly be countered with some good news of Monsoon , next quarter results , crude cooling off etc. which may take some time 

 Psychometric Analysis

Since Market were oversold , we witnessed a bounce .Investors are still waiting on the sidelines. Bounce is a resultant of short covering of sellers mostly and few trading positions. So heavy selling or crash kind of scenario is very unlikely. Any movement up or down will be slow and steady with range bound pattern.