Strong Selling Pressure in the last hour drags Indian Indices lower - Angel Broking

Yesterday, our benchmark indices opened quietly on the back of mixed global cues. Subsequently, indices moved higher and traded with positive bias throughout the first half. Nevertheless, strong selling pressure in the final hour of the session dragged indices lower to close almost at the lowest point of the day. During the session, the Health Care and Capital Goods counters outperformed our benchmark indices; whereas the Consumer Durables and Banking sectors ended on the losing side. The advance to decline ratio was marginally in favor of declining counters. (A=1119 D=1215)(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:

The bulls made a valiant attempt to move higher in the initial hours of the trade. However, as expected the hourly '20 EMA' became the major hurdle for the bulls and as a result; we witnessed a sharp correction towards the latter part of the session. For the second consecutive session, indices have closed around the 'Downward Sloping Trend Line' and '89 EMA'. Hence, we reiterate our view that only a sustainable move below 19443/ 5895 would 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, yesterday's high of 19743 / 5982 would act as an immediate resistance for our market.

Source : Equity Bulls

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