After making history yesterday, the Indian markets opened on a volatile note. Intensified buying activity at lower levels pushed the indices back into the positive territory.While the rest of the day saw the markets remaining firm, towards the closing session the markets pared their gains as investors chose to book profits. While the Sensex managed to end the day with a gain of around 17 points, the Nifty closed lower by about four points. Stocks from the mid-cap and small-cap space also ended the day on a firm note, higher by 3.6% and 2.5% respectively. On the daily chart, the Nifty is resting around a previous swing’s resistance, the level for which is 4468. Also, the Nifty has retraced more than 50% of the entire fall from the peak of January 2008. Taking these two points into consideration, the probability of a small dip is far more.So until the above two hurdles are cleared on a decisive basis, bulls should remain cautious. Bulls, with 927 advances and 339 declines, dominated market breadth.

On the hourly chart, the momentum oscillator KST after touching the lifetime overbought region has started to slide. Our short-term bias has been revised down for a target of 3900 with reversal packed at 4510. However,our mid-term bias is still up for the target of 4550 with reversal placed at 3700.

While banking and realty sectors led the pack of gainers,stocks from the software and energy sectors were at the receiving end. From the 30 stocks of Sensex DLF (up 19%),SBI (up 11%) and Reliance Communications (up 10%) led the pack of gainers. On the other hand, Infosys (down 12%), Wipro (down 9%) and TCS (down 8%) led the pack of losers.

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

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