Technical outlook for the fortnight

Key highlights

The US markets continued to hold strong in the fortnight gone by. In fact, the prices of crude oil crossed the $90 per barrel-mark last month, making its alternatives more appealing. However, the Indian markets started the year 2011 on a shaky note. The markets took a beating and underperformed against other Asian countries. Negative factors like high inflation, interest rate hike, weak IIP data and rising food inflation kept sentiments nervous on the domestic front during this period.

The markets started correcting in the first week of the new year in the January series on huge redemption pressures from FIIs on a strong dollar, despite a 195-point rally in the December Series on the Nifty, on the back of strong liquidity inflows.

The correction was the result of the Dollar Index