9am with Emkay; 24 November, 2010

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9am with Emkay

n        Dealer Comments

The markets started the day’s session on a negative note with 140 odd point’s downward gap led by weak cues from the world markets particularly the extremely weak Asian counterparts. Post weak opening markets further wilted under selling pressure in the absence of any major positive trigger and concerns regarding Euro zone nations haunting the investor fraternity as of now. Post noon indices cracked heavily almost 3% down on news of North Korea firing artillery shells at South Korean islands leading to a huge sell off by FII’s across the Asian markets including ours. At this time around both Sensex and Nifty lost almost 600 and 180 odd points. Markets look tired and exhausted, after a dream run recently and seem to be bogged down by weak European sentiments fearing the risk may probably spread to Portugal and Spain and may even cover Italy and France going down the lane. The markets were dragged down mainly by heavy selling in oil & gas, banking, realty and psu stocks. Before the closing bells markets staged a remarkable recovery in last hour of trade suggesting that markets priced in the earlier jitters. Finally the markets closed the day on a negative note towards the end with Sensex losing 266 points or 1.33% lower to settle at 19692 levels while Nifty lost 75 points or 1.25% lower to settle at 5935 levels. The overall traded volumes were quite higher compared to the earlier day by almost 40% and were at Rs 2714 bn. While delivery based volumes were lower compared to the earlier day at 40.6% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 5.22 bn while Domestic Funds were also net buyers to the tune of Rs 2.97 bn respectively on 22nd November 2010. While on 23rd November 2010, in the F&O segment FII’s were net buyers to the tune of Rs 14.16bn.

n        Technical Comments

Bullish Hammer at the trendline support

After a highly volatile session, Nifty finally ended with a loss of 80 odd points. Today’s price movement formed a Bullish Hammer both on hourly and daily degree. A Bullish Hammer on daily chart, after a fall of 500 odd points’ means “the market is hammering out” a base in the short term. An add-on to this observation is that the Bullish Hammer is formed at the rising trendline support (drawn connecting the lows of 4923 and 5348), after a minor whipsawing which was witnessed in today’s session. As per the retracement theory, we have completed a 50% retracement of the previous leg, which again tell us that a bounce from current levels cannot be ruled out.

BSE Auto:

BSE Auto index has formed a Dragonfly Doji candlestick pattern near the support of 50-DSMA and hence we are looking for a bounce upto 10500 level.