Fresh yearly lows

The indices opened flat and fell sharply due to consistent
selling among the heavy weights. The fall continued till
mid afternoon (an hour before the last), when the indices
hit the yearly lows. The indices did trim some of their
losses in the final hour, but still ended negative for the
day. On hourly chart, as the momentum indicator is in
oversold region some bounce can be expected in the
coming session, though that bounce is expected only up
to 4000 levels, which is 50% retracement of the fall from
4,207 to 3,778. On daily chart, the momentum indicator
KST is still enjoying its negative trend, which indicates
that the bears will have an upper hand over the bulls in
the near term. Market breadth was depressing with 1,211
declines and only 68 advances.


On hourly chart, the momentum indicator KST is still in
the negative mode, but the gap between the indicator
and the moving averages is getting thinner. We are
revising our short-term target to 3,700 with reversal at
4,000 and our mid-term target to 3,600 with reversal at
4,120.


Sensex and Nifty ended the day with a loss of 506 and 135
points respectively. All the 13 sectors ended in the red
with the banking and consumer durable sectors faring the
worst. Of the 30 stocks that make the Sensex, ICICI Bank
(-13%) Jaiprakash Associates (-11%) and Satyam Computer
Services (-9%) were the worst hit, whereas only Hindustan
Unilever was in the green with a minor gain of 0.3%.