Markets on August 10, 2009: Back-to-back losses

After a bullish opening, the domestic stock market started to see a wave of profit taking in the midst of the session,which continued all ...

After a bullish opening, the domestic stock market started to see a wave of profit taking in the midst of the session,which continued all through the trading session. The Sensex and the Nifty were down by 150 points and 43 points respectively at closing bell. BSE MIDCAP and BSE SML, the mid-cap and small-cap indices on the BSE, closed 1.7% and 1.9% lower respectively. On the daily chart, though Nifty has broken the 20 day simple moving average (20- DSMA), the 40 daily exponential moving average (40- DEMA) and the rising trend line are still intact, which indicate that the medium-term trend is still unclear. On the hourly chart, the index has given a negative crossover of 20- and 40-hourly moving averages, which are encouraging signs for the bears. For the coming session, 4380-4420 is a good support zone for Nifty. Looking at the oversold hourly momentum cycles, a bounce in Nifty would not be a surprising move, but the view still remains sell on rise in the zone of 4520-4560. The daily KST continues to remain in sell mode. The overall market breadth was negative with 956 declines and 284 advances.

Our short-term bias is down for the target of 4325 with the reversal packed at 4732. However our mid-term bias is still up for the target of 5000 with the reversal pegged at 4325.



Selling was seen across the sectors with automobile,telecommunication, retail and fast moving consumer goods’ counters hit the worst. From the 30 stocks of the Sensex, Tata Consultancy Services (up 6%) and Wipro (3%) led the pack of gainers while Mahindra & Mahindra (down 9%), ACC (down 7%) and Hero Honda Motors (down 4%)led the pack of losers.