Markets on May 21: 20-HSMA breached

After a cold start, the market gained momentum on selective buying in index heavyweights. However, profit booking in the same during the f...

After a cold start, the market gained momentum on selective buying in index heavyweights. However, profit booking in the same during the final hour led the Sensex end 324 points lower and Nifty 59 points down. The BSE MIDCAP (mid-cap index) and BSE SMLCAP (small-cap index) ended 0.1% and 2.58 % higher respectively. Capital goods, banking and auto sector stocks came worst off.On the Sensex, we have a bearish breakout of the previous inside bar, which is not a healthy sign for the market. However the latest bullish gap, which occurred two trading sessions ago, provides a ray of hope. Nifty has also breached the 20-hourly simple moving average (20-HSMA) and the next support is pegged at 4055. With 924 advances and 321 declines on the NSE, bulls dominated the market breadth.

On the hourly chart, the momentum oscillator KST is still riding its negative crossover. Our short-term bias is down for the target of 3900 with reversal placed at 4510. However, our mid-term bias is up for the target of 4550 with reversal at 3700.

From the front-line stocks, Reliance Communications and Suzlon Energy fall in the category of feeble stocks for the coming session. From the 30 stocks of the Sensex, ONGC (up 8%) and Ranbaxy Laboratories (up 3%) led the pack of gainers, while Larsen & Toubro (down 9%), Maruti Suzuki India (down 7%) and ICICI Bank (down 5%) were hit the worst.