The stock market began the week on a drab note. Sensex opened with a negative gap, which remained in place all through the trading session. This is a not a healthy sign. Further, the dip in Sensex was supported by heavy volumes,which again is not a good sign for bulls. On the daily candlestick chart, Sensex has formed an evening star (a bearish reversal pattern) and that too on heavy volumes, which again goes against the bulls. On the hourly chart,the first bullish trend lines have been roken and presently the market is resting at the second one. Also, the 40 hourly exponential moving average is intact. If these two support areas are broken, the market will slide further. The upmove of daily KST is disrupted. Bears headed the market breadth with 811 declines and 385 advances.
The hourly KST is driving its negative crossover and has also breached the zero line. Our short- and mid-term biases are up for the target of 3150 and 3200 espectively with the short- and mid-term reversals pegged at 2950 and 2738 respectively.
Sensex closed the session 480 points down and Nifty ended 130 points down. Mid-caps and small-caps also ended the day in the red. Selling was witnessed across sectors led by banking and metals stocks. From the 30 stocks of Sensex only National Thermal Power Corporation was in the green. Jaiprakash Associates (down 12%), ICICI Bank (down 12%) and Tata Steel (down 12%) led the pack of losing stocks.