After falling into the red in afternoon, persistent buying during the second half led the indices to end on a flat note. The Sensex ended 4 points down, while Nifty was up 5 points. Mid caps and small caps continued their upsurge with the BSE MIDCAP and BSE SMLCAP ending 1.5% and 2.1% higher respectively. For the second day in the row, the indices ended the day on a flat note, which indicates that the tug-of-war between the bulls and the bears is going strong and indecision about the next move prevails. Additionally, we are having an inside bar pattern after the end of today’s session, which adds to indecision.So, unless we get a breakout of the inside bar, it is advisable to remain cautious. Upside breakout of the inside bar will occur above 4587, while downside breakout will occurs below 4451. The negative crossover of momentum oscillator KST still prevails. Market breadth is positive with 883 advances and 381 declines on the NSE.

The 20-hourly simple moving average is still intact. Our short-term bias is down for the target of 3900 with reversal packed at 4510. However, our mid-term bias is up for the target of 4550 with reversal placed at 3700.

While buying was seen in fast moving consumer goods (FMCG), consumer durables and healthcare stocks,banking and information technology stocks ended the day on a negative note. From the 30 stocks of Sensex, Hindalco Industries (up 6%), ITC (up 6%) and Jaiprakash Associates (up 5%) led the pack of gainers, while Mahindra & Mahindra (down 4%), Infosys Technologies (down 2%) and State Bank of India (down 2%) led the pack of losers.

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

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