The indices slipped in opening trades and traded weak almost through out the day, before a late afternoon surge saw them regaining ground and trade positive. Nifty closed marginally in the red, whereas the Sensex closed in the green. The daily momentum has slowed down considerably and is about to give a negative crossover. The wave targets around 4570 levels on Nifty have been met and also hints at possible correction. The overall breadth has been negative after a long time, hinting at slowing momentum and profit taking. Nifty should now correct towards 4400-4450 levels in the coming trades, and a break below 4400 would lead to a sell off. Upside looks capped within 4600-4650 levels; a close above 4650 would lead to further wave extensions though the probability is low.
On hourly charts, the momentum indicator has triggered sell readings along with negative divergences, hinting to test 20 hourly exponential moving average at 4450 and below it a 4400, which is 38% retracement level. The shortterm bias remains down with the revised reversal at today’s high of 4586.
Reliance Industries has closed weak and further weakness will creep in if the stock breaks Rs2,214 levels. Banks too traded weak with Axis Bank looking set to target Rs670 levels. Satyam Computer Systems in the information technology pack has moved up nicely and should target Rs67-70 levels.