Markets on April 2: Gap up (Widening formation)

After opening with a gap of 150 points, Sensex continued to move up all through the day, and did succeed in maintaining the opening gap. T...

After opening with a gap of 150 points, Sensex continued to move up all through the day, and did succeed in maintaining the opening gap. The volumes for the day were historic—the highest since November 2007—which also supports today’s bullish gap. This is a good sign for the bulls and bad for bears, as the latter should remain cautious till this gap is filled. On the hourly chart, Nifty is forming a widening pattern according to which it should touch the upper trend line whose target comes around 3300. The daily momentum oscillator KST is still positive.Bulls dominated the market breadth with 1,031 advances and 204 declines.

Though the hourly KST is positive, it is heavily oversold.Our short- and mid-term bias is up for the target of 3250 and 3300 respectively with the short- and mid-term reversal pegged at 3060 and 2800 respectively.

Sensex closed 446 points up, while Nifty ended the session with gains of 150 points. Mid-cap and small-cap stocks also posted gains for the day. Barring fast moving consumer goods (FMCG) stocks, buying was witnessed across sectors, with realty, metal, capital goods and energy stocks leading the way. From the 30 stocks of Sensex, DLF (up 15%), Jaiprakash Associates (up 13%) and Tata Motors (up 13%) led the pack of gainers, whereas Hindustan Unilever (down 3%) was the sole loser.