Markets on March 6: Relief rally (At equipoise)

The domestic stock market after a negative opening staged a strong comeback, making higher peaks for the day. Sensex finally ended the da...

The domestic stock market after a negative opening staged a strong comeback, making higher peaks for the day. Sensex finally ended the day 128 points up and Nifty closed 43 points higher. On the daily chart of Nifty, the follow-up of the outside bar came downside, which indicates that the downside pain is not yet over and that today’s rally should be taken only as a relief rally instead of an up-move. On the hourly chart, Nifty is forming a bearish flag, which is a continuation pattern. On the break of the lower trend line of this bearish flag, a speedy carnage will take place. On the other hand, one of the bearish channels and also the 20-hourly simple moving average have been violated, which is an advantage for bulls. So, until a sure shot bearish trigger occurs, waiting on the sidelines will be a safer bet. Bears dominated the market breadth with 688 declines and 492 advances.

The hourly KST has given a positive crossover. Our shortand mid-term biases are still maintained with a downward bias for the target of 2550 and 2450 respectively with the short- and mid-term reversal nailed at 2800 and 3111 respectively.

Led by the strength in IT and energy stocks, the domestic market surged strongly in today’s trades. From the 30 stocks that constitute Sensex, HDFC (up 6.4%) and Hindalco Industries (up 4%) were in forefront of gaining stocks of the day, whereas Maruti Suzuki India (down 3%) and Hindustan Unilever (down 3%) posted maximum losses.