The markets witnessed huge selling pressure in the last one hour of the trade and ended with deep cut after seeing consolidation for the last two days. The Sensex ended at 15,514 down 2.45% or 390 points after hitting a low of 15,443. The Nifty touched an intraday low of 4559 before closing 2.31% or 109 points lower at 4585. Among the broader indices, the BSE Midcap Index lost 2.4% and the Smallcap Index was down 1.3%. All the sectoral indices ended in the red. Auto, realty, metal, FMCG, infrastructure and technology stocks saw huge selling pressure. The market breadth was negative and the Volumes crossed the Rs 1 lakh crore mark, total traded turnover was at Rs 1,02,020 cr. as against Rs 87,766 cr.

After two day’s of consolidation markets witnessed a huge sell?off in the last one hour of trade after the met dept. have said that the rainfall for the week?ended August 5 was at 23.5 mm, which is 66% below normal. The monsoon has been a cause of worry for the nation in June being a slack season. All eyes are now on how monsoon fares in Aug and a dismal rainfall could be bad news for the country’s agriculture, economy and even stock market.

The intermediate trend still remains UP unless nifty breaks below 4410 but going forward its very necessary that nifty maintains above 4710 for a fresh development. We have seen for the last four trading sessions that nifty has been trying to sustain above the 4700 mark but couldn’t manage even after positive move from the global peers. This clearly suggests that markets are waiting for a fresh trigger which could drive the nifty above 4700. Even FIIs have turned negative of 690 cr. in the cash segment on Wed.

We are seeing that the trend is slightly getting weaker and we could take some more time to cross the 4700 mark and consolidate at lower level and create a base before giving a breakout on the higher side. The 50?day moving average is placed at 4412 which should act as a strong support area. This intermediate trend will get in danger only if nifty breaks below 4380, till then every fall should be a buying opportunity keeping a strict stop?loss.

For tomorrow’s intra?day trade 4550 should act as a strong support and a trade below could again create a panic selling and we could test 4495, resistance is at 4660.

INDEX PIVOTAL:

1) RELIANCE IND (2047) – The stock is still in a positive territory, unless it breaks below 1970 there is a strong possibility of taking the leadership. On the higher side 2095 will act as a strong resistance point.

2) SBI (1797) – This stock also remains in a positive trend, strong support is placed around 1740?1690 levels where buying could emerge. On the higher side 1840 will be the resistance level.

3) STERLITE (648) – The stock has support around 620, can be bought on dip with a stop?loss of 595. Resistance is at 670, if maintains above then look for a target of 710.

Nifty future daily chart: Strong supply is seen above the 4700 mark and nifty future has touched its previous top of 4730 hit on 03rd Aug 09 and corrected sharply from that point. Now it suggests that nifty had made a double top and could correct sharply. But there is still no evidence that markets could fall drastically, it’s just a profit booking after a sharp run?up. Strong support is placed at 4480, unless we break below this point there is no worry. Resistance continues to be at 4730.