Sensex crashes on strong selling pressure - Angel Broking

Yesterday, our benchmark indices opened lower on the back of negative developments across the globe and significant weakness in rupee. Immense selling pressure was seen as the day progressed and eventually markets closed at almost the lowest point of the session. All sectors ended in the negative territory with the Consumer Durables, Metal, Realty and Banking counters leading the decline. The advance to decline ratio was strongly in favor of declining counters. (A=670 D=1691) (Source-www.bseindia.com)

Formation

- The '20-week EMA' and the '20-day EMA' are placed at 19378/ 5875 and 19754/ 5991 levels, respectively.

- The '89-day EMA' and the '200-day SMA' are placed at 19443/ 5897 and 19095 / 5790, respectively.

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

- The weekly 'Bearish Engulfing' and the monthly 'Shooting Star' Japanese candlestick patterns are still intact.

Trading strategy:

Yesterday, indices opened on a pessimistic note and immediately during the initial hour, breached the crucial support of 50% Fibonacci retracement level placed at 19294 / 5853. As expected, this triggered massive selling pressure in our market and indices almost tested the mentioned support level of 61.8% Fibonacci retracement at 19022 / 5764. We are now observing that indices are also hovering around the daily '200 SMA' placed at 19109 / 5794. This technical indicator is considered as a decent support level. Hence, going forward, only a sustainable move below yesterday's low of 19121 / 5780 may lead to a further fall towards 18870 / 5732. On the flipside, 19350 - 19419 / 5807 - 5868 levels would act as resistance in coming trading session.

Source : Equity Bulls

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