>EAGLE EYE ON 14/09/09 (SHAREKHAN)

EXHAUSTED MOVE

Markets on Sep 11, 2009: Sideways

After a breakout from the range (4700-4350) at the start of the week on Monday, the market traded sideways around 4850 the following days. The market continued to be in the range for the third consecutive day between 4780-4860 today. In the first half of today’s session Nifty traded lower as selling pressure continued around the resistance level of 4850, but it recovered well from its lows in the second half and managed to close marginally positive. This suggests that 4850 and 4890 remain very crucial resistances and a close above that will lead to another leg of rally; till then 4750-4700 remains good supports on the lower side. So, as long as these levels are held on, we maintain are bias up for the target of 5000 and the reversal down below 4575. Nifty is currently
trading above 20 daily moving average (DMA) and 40DMA i.e. 4676 and 4578 respectively, which are crucial support levels going forward. The momentum indicator (KST) has turned up and has given a positive crossover.

On the hourly chart, Nifty is trading above 20 hourly moving average (HMA) and 40HMA i.e. 4811 and 4776 respectively, which are crucial supports in immediate run. The momentum indicator (KST) has given negative crossover but trading above the zero line. The market breadth was
negative with 438 advances and 814 declines on the NSE and 1,129 advances and 1,737 declines on the BSE.

The indices ended marginally positive—Nifty 16 points up and Sensex 47 higher. Of the 30 stocks of the Sensex, Hindalco Industries (up 6%) and Ranbaxy Laboratories (up 4.5%) were the top gainers, while DLF (down 2.5%) and Sterlite Industries (down 2.5%) were at the bottom of the
table. Banking and IT sector stock were trading with positive momentum, while realty stocks were in red.

To see full report: EAGLE EYE 140909