The Indian stock market took heavy pounding today, as selling persisted till the final minutes of trade. At close,the advance decline ratio at the BSE stood at 1:6.5 The Sensex ended 437 points down, while Nifty closed 157 points lower. Mid-cap and small-cap stocks also ended the day on a weak with the BSE MIDCAP and the BSE SMLCAP ending 5.45% and 5.8% down respectively. On daily candlesticks chart, the Sensex has formed a bearish engulfing pattern (a bearish reversal pattern) around 61.8% retracement level of the entire fall from 21000,which is not a good sign for bulls. On hourly chart, we are having a negative divergence, which indicates that Nifty should at least fall back up to the lower line of the channel,again a negative for bulls. The market has also violated hourly averages--one more reason for bears to cheer.

The hourly momentum indicator KST has given a negative crossover. We are revising our short-term bias down for the target of 4200 with reversal pegged at 4,640, while our mid-term bias is still up for the target of 4850 with reversal at 3861.

Bar information technology (IT) stocks, selling was seen in all counters with realty, metal, banking and capital goods leading the way. From the 30 stocks of the Sensex, Wipro (up 3%), Infosys Technologies (up 3%) and Tata Consultancy Services (up 2%) led the pack of gainers, while Jaiprakash Associates (down 10%), DLF (down 10%) and Tata Steel (down 10%) led the drove of losers.

(Disclaimer : The above chart shown is for study purpose only and not for trading decision)

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