Even though the domestic stock market recouped a part of losses in the final minutes of trade, the indices ended the day well below the previous closing levels. The Sensex ended 362 points down, while Nifty closed 99 points lower. On the daily chart, Nifty is near its 20-daily simple moving average (20-DSMA) pegged at 4422. So till Nifty closes below 20-DSMA, the probability for a bounce remains. On the hourly chart, the rising wedge saw a downside breakout. Also, the hourly 20-simple moving average and 40-exponenetail moving average have been violated. The overall decline to advance ratio was poised at 2:1 on the BSE.
The hourly KST continues to be in a sell mode. Our shortterm bias is down for the target of 4200 with the reversal pegged at 4700, while our mid-term bias is still up for the target of 4850 with the reversal placed at 3861.
Barring select stocks from the fast moving consumer goods space, selling was witnessed in stocks across sectors with oil and gas, metal and capital goods stocks leading the way. From the 30 stocks of the Sensex,Ranbaxy Laboratories (up 2%) and Tata Consultancy Services (up 2%) led the pack of gainers, while Reliance Industries (down 7.5%), Sterlite Industries (down 7.5%)and Tata Steel (down 5%) led the clutch of losers.