Selling in index heavyweights continued unabated right till the closing bell, which ensured a negative close for the markets. It thus did not support the bullish engulfing pattern on the candlestick chart. But till the support zone of 3535-3515 is not broken, last hope for a comebackrally will be alive. Also, there is a support of 20-daily simple moving average (20-DSMA) around 3515, which makes it a more defining level. On the hourly chart, today, we had a double top formation, which will get confirmed on the breach of the hourly averages. The daily momentum oscillator KST is still in the sell mode. The bears dominated the market breadth with 706 declines and 503 advances.

Currently, the hourly momentum cycle is positive, but on its negative crossover it will also confirm the negative divergence, which will not be a good sign for the market.Our short- and mid-term biases both are up for the target of 3750 with reversal placed at 3530 for short term and 3515 for medium term.

The Sensex closed 138 points lower, while Nifty closed 45 points down. Metal, information technology, fast moving consumer goods and banking stocks led the pack of losers.From the 30 stocks of the Sensex, ACC (up 3%) and HDFC (up 3%) led the pack of gainers, while Tata Steel (down 4%), Sterlite Industries (down 3%) and ONGC (down 3%) were in forefront of losing clutch.

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

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