Markets on June 24, 2009: 40-DEMA holds (Bullish momentum continues)

After a lacklustre start and listless first half, buying during the second half led the stock market end with handsome gains. The Sensex e...

After a lacklustre start and listless first half, buying during the second half led the stock market end with handsome gains. The Sensex ended 98 points up, while Nifty closed 45 points higher. Stocks from mid-cap and small-cap spaces also ended the day on a positive note. On the daily chart, after respecting the demand area near 40-daily exponential moving average (40-DEMA), Nifty has started to show some life. Price has confirmed the up-move by breaking the streak of lower highs. Intraday chart suggests that as Nifty is on the verge of approaching its 40-hourly exponential moving average (at 4316), where some supply can be expected, traders should take a long trade only after 4316 is breached decisively in tomorrow’s session.The hourly momentum cycle is also favouring the bulls.Bulls with 950 advances and 290 declines dominated the market breadth on the NSE.

Our short-term bias is up for the target of 4450 with the reversal pegged at 4100. However, our mid-term bias is down for the target of 3870 with the reversal placed at 4700.

Buying was seen in power, consumer durable and healthcare stocks, while oil & gas and banking counters led the pack of losers. From the 30 stocks of the Sensex, Jaiprakash Associates (up 6%), Sun Pharmaceutical Industries (up 5%) and Tata Consultancy Services (up 4%) led the pack of gainers, while HDFC Bank (down 2%) and HDFC (down 2%) led the clutch of losers.