Nifty Futures extends downslide - BRICS Research

Nifty Futures extends downslide for the second successive session, short term trend remains down, resistance stays at 6120-6130.

Nifty Futures extends Friday's sell off by another 41 points to close at a five week low of 5959 led by selling pressure in Oil & Gas, Power and Capital Goods counters. Select Technology, Telecom and Media stocks acted as pockets of strength in a session where distribution continued to persist. Overall market breadth remained weak with nearly 57% of stocks comprising the broader BSE 500 index closed in the red. Declines outpaced advances in the ratio of 2:1 for the benchmark BSE 30 index. Volumes in yesterday's session were a tad lower than the 5 day average mark.

No change in the underlying short term trend which continues to stay down. As we have stated in yesterday's report, the index is in the process of forming a "Head and Shoulder" bearish reversal pattern with a 4-5% downside implication in the near term (see chart). A confirmation for this pattern shall occur on a breakdown below the falling neckline at yesterday's low of 5925 levels. Therefore we maintain our negative bias for the near term and our sense is that traders must utilise bounceback rallies to initiate short positions in the current scenario. Immediate upside resistances to watch out for lie around 6040 -6050 levels for the coming session. Only a move above the overhead supply zone at 6120-6130 can reverse the underlying downtrend in Nifty. Trade Well.

Source : Equity Bulls

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