Domestic indices started the day with a positive gap and gained in strength as buying activity intensified. However much of the gains were given away in the second half of the session though the indices managed to end the day in positive. On daily chart of Nifty, a minor throw-under, below the lower trend line of the triangle, has been witnessed. Further this throw-under has occurred near the swing support of 2661, which indicates that index is under the formation of double bottom. Application of retracement theory on daily chart reveals that the double bottom formation has taken place near 61.8% retracement level of the entire move from 2502 to 3141. Also, on today’s positive close Nifty has also cleared the bearish trend line, which is one more sign of optimism. On the daily chart, the positive crossover of the momentum indicator Stochastic also yells that the ball is in the court of bulls. Bulls outnumbered the bears with 608 advances and 551 declines.
Hourly momentum is still positive and rising. Our short-term bias is up for the target of 2865 with reversal nailed at 2705. However, our mid-term bias is still down for the target of 2450 with reversal pegged at 3111.
Sensex closed 80 points higher, while Nifty added 28 points to its value. Mid-cap and small-cap stocks also posted gains for the day. While software and auto stock led the pack of gainers, capital goods and realty stocks led the pack of losers. From the 30 stocks of Sensex, Mahindra & Mahindra (up 8%), Tata Motors (up 6%) and Reliance Infrastructure (up 4%) led the pack of gainers, whereas Ranbaxy Laboratories (down 4%) and HDFC (down 3%) topped the chart of losers.