Immense Selling Pressure pushes Nifty down - Angel Broking

Yesterday's session started on a quiet note in-line with mixed global cues. Indices then immediately moved higher and in the process, the Nifty crossed psychological level of 6100. However, just before the midsession, we observed immense selling pressure and markets pared all gains to eventually close in negative territory. Although all the sectoral indices contributed to yesterday's correction, the Realty, Consumer Durables and FMCG counters corrected the most. The advance to decline ratio was strongly in favor of declining counters (A=853 D=1479) (Source -www.bseindia.com).

The '20-day EMA' and the '20-week EMA' are placed at 19755 / 5991 and 19047 / 5781 levels, respectively.

On the daily chart, the benchmark indices are facing resistance near the 'Upward Sloping Trend Line' drawn by joining the highs of October 5, 2012 and December 11, 2012.

We are also observing a 'Negative Divergence' in the daily 'RSI' momentum oscillator.

Yesterday, indices initially moved higher towards the 'Upward Sloping Trend Line' shown in the chart. As expected, this trend line acted as a strong resistance for the market. As a result, indices slipped very sharply during the second half. In the process, indices have eventually closed below Monday's low of 20056 / 6065, fulfilling a characteristic of 'Bearish Narrow Range Body' formation. Considering bearish implication on this pattern coupled with the negative crossover in daily '3 & 8 EMA' and hourly 'ADX (9)' indicator, we can expect a correction towards the 19918 - 19783 / 6025 - 5988 levels. On the flipside, yesterday's high of 20157 / 6102 would now act a resistance in coming trading session.

Yesterday, Bank Nifty opened on a flat note and headed higher during the initial part of trade. However, selling pressure near the resistance level of 12756 led the index to close below the strong support level of 12582. Thus going forward we expect the Bank Nifty to correct further over the next few sessions. On the downside, 12427 / 12366 may act as support levels over the next few sessions. On the upside yesterday's high of 12748 is now expected to act as a stiff resistance for the Bank Nifty.

Source : Equity Bulls

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