We saw that the Nifty opened strong in the morning session at 5850 levels. After that, the markets dipped downwards and was trading at 5750 levels. Thereafter, the markets pull backed to 5825 levels, but again dipped downwards to 5750 levels. After that, the markets again made an attempt to move upwards, but the intra day choppiness continued as the markets faced heavy resistance at 5850 levels and moved downwards. Hence, the Nifty closed flat for the day at 5782, (-0.07%) below its previous close. But, the advance: decline ratio was negatively biased at 401:782.

The American Markets have closed very weak. The Asian Indices are trading at lower levels. We can expect a gap down opening for our markets in the morning session. But, the next downward support at 5700 could also be breached and the markets could test further lower levels .Hence, we expect a very weak closing for our markets today. We can see that the markets have closed at 5782 levels yesterday. We can also notice on the daily charts that the 38.2% retracement for the markets from the 5070 lows on 22/10/2007 to the 6012 highs made on 1/11/2007 is at 5650 levels. We, also know that in very strong bull markets, it is very common for the prices to retrace to 38.2% levels. Hence, we expect the markets to slowly drift downwards to 5650 levels in the short term.

The BSE Oil & Gas index closed at 11688 levels yesterday, which is (2.63%) above its previous close. We can see that this index is currently trading close to its all time high levels. This index, has got a strong support at 11350 levels, which should hold in the short term. Hence, we expect this sector to move to the 11900 levels in the short term. We like GAIL and Indian Oil in this sector.

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