Bears dominate

Nifty has broken two crucial supports ie 4945 and 4920, after which as expected, the panic spread across all the sectors. Momentum indicators also favour bears. On the higher side, the lower end of the parallel channel at 5100 remains a major resistance. The high of 5055 also remains a strong resistance. On the lower side, the next support exists at 4780-4750, which again is crucial, as when it will be broken the selling pressure will be intense. So, overall we maintain our bias down in the short term for the target of 4750.
On the daily chart, Nifty is trading below its 20-daily moving average (DMA) and 40DMA at 5030 and 4920 respectively, which are resistances in the near term. The momentum indicator (KST) has given a negative crossover and is trading below the zero line. The market breadth was negative with 112 advances and 1,176 declines on the NSE and 495 advances and 2,365 declines on the BSE.
On the hourly chart, Nifty is trading below its 20-hourly moving average (HMA) and 40HMA at 4978 and 5038 respectively, which are now resistances in the short term. The momentum indicator (KST) has a given negative crossover and is trading below the zero line.
Nifty and the Sensex closed in red losing 124 and 387 points respectively. Of the 30 Stocks of the Sensex Wipro (up 2.18%) and Dr Reddy’s Laboratories (up 1.58%) were the top gainers while Hindalco Industries (down 7.92%) and TISCO (down 7.26 %) were the top losers.