The benchmark indices witnessed a huge sell?off across the sectors led by global fall which pushed the Sensex below the psychological 15,000 mark and the Nifty below the 4,400 level. Among other Asian markets, Hang Seng tanked 3.6%; Straits Times down 3.25% and Taiwan Weighted down 1.95%. Kospi fell 2.85, Japan's Nikkei fell 3.1%, the biggest one?day fall in nearly five months. European markets were down 1.8?2.4% and US index futures fell nearly 2%. All these negative factors hammered the Indian equities badly. The Sensex shed 627 points or fell 4.07% to settle at 14,785 and the Nifty tumbled 4.20% or 192 points to 4388. The broader indices followed the same trend and lost 3?3.9%. All sectoral indices were in the red. Realty, metal, oil & gas and auto stocks were among the worst performers. The Aug July nifty future ended with 13 points discount.

As we were continuously mentioning that the trend remains cautious and the only factor which was supporting were the positive global cues. But today after a massive sell?off seen in the Asian markets, the Indian markets also collapsed and saw huge unwinding in the high momentum stocks. Due to any fresh positive triggers we see the Indian markets drifting lower to the extent of 5?8% from the current level.

The short?term trend has turned very volatile and if nifty breaks the important support of 4330 then the fall could be very sharp and one should not try to catch the falling trend. This fall could be towards 4110 or extreme 3930. The Shanghai Comp index has closed at 2870 which is 33.3% retracement from the recent top of 3478 to the low of 1664. If China index trades decisively below 2870 then next level could be 2570.

The technical oscillators are also suggesting a sharp weakness in the trend but the Bollinger band is placed at 4362 and if we break on the closing basis then we may fall sharply. For tomorrow support for nifty is placed at 4330?4280 region and if these levels are held then we don’t see major selling happening. But if nifty trades below these levels then 4110?3930 is quite possible. Major resistance is at 4460? 4510 unless we see stability above these levels every rise should be used as a selling opportunity. Buying is sensible only below the 4000 mark from an investment perspective and not at this current scenario.

INDEX PIVOTAL:

1) RELIANCE IND (1942) – The stock has closed below its important support of 1990 and turned weak. Going forward if it breaks 1915 then it could spoil the trend; next level could be 1880?1840. Unless you see a closing above 2050 the trend remains weak.

2) SBI (1713) – Support is placed in the region of 1670?1710; unless you see a break below 1650 this stock can be bought on dip. Resistance is at 1750, if it maintains above this point then witness huge buying upto 1840.

3) TATA MOTOR (436) – This stock is still holding its upper band, if breaks 425 see a correction upto 410?380 and on the higher side 450 remains a major hurdle. Add fresh long position only if it maintains above 450.

4) BANK NIFTY (7086) – Strong support exit at 6950?6810 levels, unless you see a trade below this level bank nifty still looks a buy. Major resistance at 7400.

Nifty future daily chart (4375): The short term trend has turned very bearish and going forward if nifty decisively trades below 4350 then the next support is at 4250?4140 as shown below. And resistance is at 4440, unless we see stability above this level we don’t see any positive development happening. Markets are poised at a very crucial level and buying should be avoided till we get more clarity on the trend.