PINC Technical Report - Daily - Pain continues

Nifty (4544 – down 68 points)

The Nifty opened the day on a muted note however persistent selling resulted in it breaching its previous days low. The Nifty finally ended the day at 4544, down 1.49%. The broader market underperformed the Nifty; S&P CNX 500 was down 1.66% and CNX Midcap was down 2.15%.

The weekly close on Friday towards the lower end of the trading range has been followed by sustained weakness for the last two trading sessions. This has deepened the bearish sentiment on the market however, interestingly this has also brought short term indicators to deeply oversold levels that creates the possibility of either a halt on the ongoing trend or a rebound even though minor in nature. We had stated in our weekly report that a Nifty below 4850 would continue to be dominated by sellers and can bring the index down to 4500 followed by 4350. We have almost reached the first target. Our medium term outlook continues to be neutral. Positive divergences and oversold signal in the medium term charts are becoming glaringly visible. Odds for a sustained medium term weakness appear difficult proposition.

The Midcap Index continues with its weakness and underperformance versus the Nifty. It has declined towards our projected level of 6000. Any pull back could continue to see supply pressure at higher levels. There is a fair chance for the index to drift lower towards 5500 if this index continues to stay below 6500.

Source : Equity Bulls

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