Markets on July 03, 2009: Close above 20-DSMA (4440 critical)

Buying during the final one and half hour led indices to surge resulting into healthy daily and weekly close. The Sensex was 254 points u...

Buying during the final one and half hour led indices to surge resulting into healthy daily and weekly close. The Sensex was 254 points up for the day and Nifty closed 75 points higher. BSE MIPCAP and BSE SMLCAP were also up by 0.8% and 0.4% respectively. Today’s close above 20-daily simple moving average (20-DSMA) is cheers for bulls.Additionally, both daily and hourly KST has shifted their bias from bearish to bullish. The only positive left now is the violation of 4440 (our short term reversal and also an important resistance level), above which shorting could turn out to be a crime. Bulls dominated the market breadth with 646 advances and 581 declines.

Our short-term bias is down for the target of 4000 with the reversal pegged at 4440. However our mid-term bias is intact on the downside for the target of 3870 with the reversal placed at 4700.

Banking, capital goods and power stocks gained the most followed by information technology, metals and fast moving consumer goods counters. From the 30 Sensex stocks,HDFC (up 7%), Tata Steel (up 4%) and Mahindra & Mahindra (up 4%) led chart of gaining stocks, while Hero Honda (down 1%) and Hindalco Industries (down 1%) were hit the most.