The benchmark indices ended the session sharply lower despite the Infosys results and the industrial output numbers beating the estimates. The Nifty closed below the psychological level of 4000. The BSE Sensex touched an intraday low of 13,418 before closing the day at 13,504 down 1.84% or 253. The Nifty shed 77 points or 1.89% to settle at 4004, after hitting a low of 3976. Among the broader indices ? the BSE Midcap Index was up 1.92% and the Smallcap Index fell 1.8%. All the sectoral indices closed in the red barring IT.

The markets saw a huge sell? off in the last hour of trade on the back of down fall in oil & gas, power, capital goods, realty, banking and telecom stocks. The market breadth was weak and the volumes were lower as compared to previous session. The July Nifty future ended with a 32 point discount at 3972. For the week the Nifty fell 9.5 % and the Sensex down 10%, the largest weekly drop since October
2008.

The intermediate trend has turned very bearish after nifty future closed below the psychological level of 4000. Markets are in a prolonged downtrend as this fall could lead us to 3720 in coming days. Monsoon concerns are also haunting the markets. Hence, markets are seeing a huge selling pressure build at higher level.

Indian markets have corrected 15% from the recent peak of 4693 upto today's low of 3977 but nifty has left a huge gap after the budget results on 18 June 09 at 3670 and we believe that during this fall the gap will be filled which is a very good sign for the market.

The technical oscillators are also suggesting that there could be another 7?10% fall from this point and this fall can be utilized as a buying opportunity from an investment perspective. Now the markets needs to consolidate at lower levels in the region of 3500?3700 and create a base before resuming the upside rally. Any sharp rise in the market should be used as an opportunity to exit or create fresh shorts. This trend will remain weak unless market trades below 4150?4250 and 14000?14300.

INDEX LEADERS:

1) LT (1358) - {SELL} The stock has been an out? performer in this entire rally and going forward if it breaks 1315 and trades below consistently then we could see further weakness. Below 1315 the stock can fall upto 1210?1125. On the higher side strong resistance is placed at 1450.

2) RELIANCE (1754) - {BUY} The stock has been underperforming after the High court verdict and it has fallen by almost 26% from its top of 2359 on 15th June till today's low of 1745. Technically it's near to the oversold region, the RSI on the daily chart is at
33. Strong support is placed at 1730?1680 regions and the 200? day moving average is at 1574. On the higher side resistance is placed at 1880?1930. A fall of 3?6% should used as a buying opportunity keeping a stop? loss of 1600. And if 1600 is taken away then next level is 1465.

3) STATE BANK OF INDIA (1543) - {SELL} The stock has been an out? performer in this entire rally but currently it's under huge selling pressure below 1650. There is a possibility that the stock can fall upto 1505?1465 or 1410.

4) NSE BANK NIFTY (6486) - This index as been holding very strong but after the budget it has corrected very sharply. Technically below 6800 this index looks very weak, next support exists around 6250 & 5700. Remain cautious in the banking stocks as the fall could be severe if the bank index breaks down.

Nifty Future Daily chart: (3993) - The trend as turned very bearish after nifty future closing below the important level of 4050. Now this downtrend could be severe in coming days as shown below with an RED arrow mark which leads toward the important level of
3760 in coming days. Strong resistance is placed at 4120?4180, unless we see a break above this points every rise should be used as a selling opportunity.