Markets on March 17: Close below 40-DEMA

In spite of paring during the final hour, the domestic equity benchmarks ended the day weak. Sensex and Nifty posted losses of 80 and 20 p...

In spite of paring during the final hour, the domestic equity benchmarks ended the day weak. Sensex and Nifty posted losses of 80 and 20 points respectively. Mid-cap stocks also ended the day in the red. However, small-cap stocks ended on a firm note. On the daily chart, Nifty failed to clear the upper boundary of the falling channel. Adding to this failure is the negative close of Nifty on daily basis.Further, the close below 40-daily exponential moving average (40-DEMA) is also a sign of weakness. The rising wedge of Nifty on hourly charts also saw a breakout. Presently Nifty is resting on the bullish trend line, and once this trend line is violated 2650 seems to be on the cards. Bulls marginally dominated the market breadth with 605 advances and 580 declines.

The hourly momentum cycle, KST, has turned negative. Our short-term bias is revised down for the target of 2630 with reversal pegged at 2806. However, our mid-term bias is still down for the target of 2450 with reversal nailed at 3111.

Sectoral wise, stocks from auto and power sectors ended the day in the green. However, stocks from information technology and banking space led the clutch of losers.From the 30 stocks of Sensex, Tata Motors (up 3%) and Hindalco Industries (up 2%) led the pack of gainers, while Tata Consultancy Services (down 4%) and State Bank Of India (down 4%) were in forefront of losing stocks.