Bears Play Show Stoppers

After positive opening, the markets were unable to hold
on to their opening gains and slid into the negative
territory in the initial hour of trade. The southward journey
continued till the final hour of trade, which pushed the
indices deep in the red. On daily candlestick chart, the
Sensex has formed a bearish engulfing pattern, which
shows that bears will have an upper hand over the bulls,
with today’s high as a dominant hurdle. Further,
yesterday’s close of the index above 20 DSMA has turned
out to be a whipsaw as today Index has again slipped
below that average, which further adds to the bearish
sentiments. Also on hourly chart, Nifty has breached the
neckline of head–and–shoulders pattern and is now
approaching towards its conservative and aggressive
targets that are placed at 2,925 and 2,875 respectively.
The daily momentum indicator KST has turned flat, yet it
has not given a negative crossover. Market breadth, which
was initially in the favour of the bulls slipped into the
favour of the bears as the day progressed.


On hourly chart, the momentum indicator KST is continuing
to ride its negative crossover. We have revised our shortterm
bias down for the target of 2,750 with the reversal
pegged at 3,250. However our mid-term bias is still up
for the target of 3,450 with the reversal nailed at 2,650.


The Sensex and Nifty both ended with a loss of 511 and
147 points respectively. All the 13 sectors of the BSE except
BSE HC ended in the red. Among the 30 stocks of Sensex
Wipro was the only stock that ended in green with a gain
of 2%, whereas Reliance Industries (-14%), Tata Steel
(-11%) and Reliance Communications (-10%) were the key
losers.