Taking cue from global counterparts, domestic markets started the week on a negative note and continued to slide all through the day on the back of persistent selling activity. And the dip gained pace towards the fag end. Sensex closed 284 points down, while Nifty was 89 points down. Mid-cap and small-cap indices also ended the day on a weak note. On the daily candlestick chart, Sensex has formed a Black Marubozu candle (a bearish candle with no shadows on either end), which is considered to be a sign of weakness. Further, Nifty has broken the swing support, as the previous two swings 2661 and 2677 have been violated. On the hourly chart, Nifty is riding the negative crossover of 20- and 40-hourly moving averages. Also, it has broken the neckline of head and shoulders pattern, which is also a scary sign. Bears totally dominated the market breadth with 906 declines and 278 advances.
The hourly momentum oscillator KST has breached the zero line on the downside. Our short-term bias is revised down for the target of 2550 with reversal nailed at 2800.Our mid-term bias is still down for the target of 2450 with reversal pegged at 3111.
Selling was witnessed in stocks across the sectors, bar consumer durables, with the banking and metals sectors leading the slide. From the 30 stocks of Sensex, Mahindra & Mahindra (up 3%) led the pack of gainers. However,Reliance Infrastructure (down 9%), Tata Steel (down 8%) and ICICI Bank (down 7%) led the pack of losers.