Engulfing bear

The Nifty has closed in the negative today and is now
expected to trade lower till 4530. A key support in the
immediate run is around 4580 and resistance will be
faced at 4660.

The Nifty ended in the negative with a loss of 22 points
while the Sensex lost 89 points in today’s trading. Of
the 30 stocks of the Sensex, Reliance Industries and
Tata Steel are expected to move down going forward.
The Nifty has given a negative close on the yearly chart
with an engulfing bear pattern, which is a bearish sign
going forward. The Nifty has been sliding down in the
last few trading sessions, closing below the crucial level
of 4693, which is a bearish sign for the market in the
short term. On the daily chart the index had taken
resistance around its 20 day moving average (DMA)
and has now started the next leg down. The Nifty had
bounced last week in an A-B-C corrective pattern and
has started the next leg down with a target of 4480 in
the short term. Overall on the daily chart the Nifty has
completed wave A and wave B, and the next leg on the
down side as wave C has started.

On the daily chart the Nifty is trading below its 20 DMA
and 40 DMA ie 4774 and 4838 respectively. The
momentum indicator has given a negative crossover
and is trading below the zero line on the daily chart.
On the hourly chart, the Nifty is trading below its 20
hour moving average (HMA) and 40 HMA ie 4676 and
4691 respectively, which are its crucial levels in the
immediate run. The hourly momentum indicators have
given a negative crossover and are trading below the
zero line. The market breadth was negative with 715
advances to 757 declines on the NSE.