Things remained more or less static on Thursday as well. The day's low did not breach the lower boundary of our short-term range nor did the day's high. The sensex ended the day lower by 0.42% while the nifty ended the day lower by 0.31%. Volumes were stagnant while the market breadth was as listless as the rest of the indicators.

The US markets slid once more yesterday and that is a cause for worry for our TMT stocks. We had mentioned last time that failure to rally above 1925 by the NASDAQ will have bearish implication. The NASDAQ touched a high of 1933 and has been sliding ever since. The important support around 1850 is now broken. The larger target for this wave down was 1859, 1709 and then 1466. There is a chance of a bounce from around the April low of 1619 as the index rises once more to form a flat pattern.

Either way it is best to steer clear of TMT stocks for a while till the bottom has been ascertained. As far as our indices, sensex and nifty are concerned, today is a crucial day. The short-term support of 3270 in the sensex and 1060 in the nifty can be broken today. If that happens, then the short-term trend will turn negative and it will be time to sell index futures with a stop at 3310 and 1072 in the sensex and the nifty respectively.

There is short-term support at 3241 for the sensex and 1047 in the nifty. Once this level is crossed, the targets are 3158 and then 3054 in the sensex (1029 and then 999 in the nifty).

TODAY'S TRADING DAY

The Indian markets have held well to the pressure from fall in overseas markets. It is the lack of sellers that seems to be aiding in this stability. A weak start to the day will give the sensex initial targets of 3273, 3256 and then 3226. Things might not deteriorate beyond 3200 today. If it does, the subsequent targets are 3180 and then 3166.

Resistance for the day will exist at 3305, 3327 and then 3359.

Published by Investwise. Phone: 022 572 1388. E-mail – [email protected]