Indian markets suffered its fourth consecutive daily loss with Nifty diving below the 5200 mark on a volatile day with low volumes. Unable to break past its 21 and 50 hourly EMAs, the bears helped pushed the index lower in the second half of the session, close to the height of the earlier ‘bullish gap’ of 5189. Even the 21-day EMA of 5212 has been violated on a closing basis indicating acceleration on the downside should follow. Breadth continues to drop in favour of declines suggesting widespread profit taking. Momentum has clearly shifted in the bearish camp in the short-term with daily and hourly oscillators rolling over. We maintain our downside target of 5125 (38.2% retracement of the up move from 4770 to 5330) and a possible test of the 200 DMA at 5094 which is also a cluster of earlier swing lows. Stop-losses can be trailed from 5300 to 5255 levels.
Barring the gains in Healthcare (+0.94%) index and Oil & Gas index (+0.07%), all other secotral indices ended lower. Among the notable losers of the day were IT (-2.34%), Metals (-1.98%) and Realty (-1.61%) sectors. Broader market Mid-cap and Small-cap indices traded in line with their frontline peer losing 0.60% each.
Bullish Setups: CNXBANK, BHEL, ITC, HMCL, BHARTI, IDEA
Bearish Setups: TTMT/A, JETIN, WPRO, ADE, SESA