Dreary close

After opening 242 points higher, the Sensex traded in a
narrow range during the early hours. However in the
second half of the trading session, the index could not
build on its early gains and finally wrapped the session on
a flat note--only 49 points higher than its yesterday’s
close. The Sensex opened near the day’s high and closed
near the day’s low, which points to weakness in the camp
of the bulls. Further, on the hourly charts, the Nifty faced
the hurdle of 40 HEMA from which the sell off came in the
afternoon session. The Nifty also closed below 20 HSMA,
which is one more sign of weakness. On the daily chart,
the level to watch out for support and resistance is 4,250
and 4,400 respectively. Apart from the above story, the
daily momentum is also dying as the indicator KST has
breached the zero line on downside. Market breadth,
which was positive, with more advances than declines
during the earlier half of the session turned in the favor
of bears with 636 declines and 574 advances. This shows
that the bears have overpowered the bulls.
On the hourly chart, though the momentum indicator KST
has not given a negative crossover, it has turned down
facing the resistance of falling trend line. Our mid-term
target is at 4,000 with the reversal at 4,650 while our
short-term bias is still down for the target 4,200 with the
reversal at 4,435.
The Sensex closed 49 points higher, while the Nifty gained
8 points for the day. The BSE Midcap index closed
marginally higher by 0.25%, whereas the Smallcap index
closed 0.05% lower. Of the 30 stocks of the Sensex, HDFC
(up 3.63%) and Tata Motors (up 2.04%) led the pack of
gainers, while Ranbaxy Laboratories (down 2.05%), BHEL
(down 1.6%) and Tata Steel (down 1.49%) led the pack of
losing stocks.