Sensex, Nifty lose nearly 1% - Angel Broking

The opening session of the week began on a flat note considering quiet global cues. However, the bears continued to keep up the negative momentum and as a result the session ended with loss of nearly a percent. During the session, the Oil & Gas, Consumer Durables and Capital goods counters remained under pressure; whereas the IT and Metal sectors defended our market. The advance to decline ratio was in favor of declining counters. (A=1013 D=1307)(Source-www.bseindia.com)

Formation

- The '20-week EMA' and the '20-day EMA' are placed at 19410/ 5874 and 19900/ 6041 levels, respectively.

- The '89-day EMA' and the '200-day SMA' are placed at 19443/ 5895 and 19048 / 5776, respectively.

- The weekly 'RSI' and 'Stochastic' momentum oscillators are negatively poised.

- The 'Bearish Engulfing' Japanese candlestick pattern on weekly chart is still intact.

- The monthly chart now depicts a 'Shooting Star' Japanese candlestick pattern.

Trading strategy:

First day of the June month started off on a subdued note and indices continued their downward trend which began last Friday. Selling pressure intensified as indices approached the important support level of 19569 / 5936. Strong pessimism constrained indices to sneak below 19569 / 5936 level but eventually managed to bounce and close around this support. Indices are now approaching the daily '89-EMA' support level of 19443/ 5895. The said technical indicator is considered as a decent support and hence, only a sustainable move below this level would now open up the possibility of testing further downside levels. In this scenario, indices may slide towards the immediate support level of 19360 / 5850. On the upside, indices may face resistance near the hourly '20-EMA' level of 19940 / 6000.

Source : Equity Bulls

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