The benchmark indices ended weak for the second day on the back of weak European cues. Selling was seen in capital goods, power, oil & gas exploration, realty, metal, pharma and banking shares. The key benchmark index ended 115 points lower at 15,551 after seeing an intra-day high/low of 15,923-15,475. The Nifty shed 37 points to finish at 4,625. The BSE midcap and smallcap indices were down 1.5% each. The market breadth was weak. The Sept nifty future ended with 10 point discount.

The short term trend is slightly getting nervous as huge selling pressure is build above the 4,700 mark. The global markets are also not providing any positive triggers and in our market the index leader Reliance Ind is also under tremendous selling pressure for the last two trading sessions. Technically Reliance is looking very weak and going forward it the stock decisively trades below 1950 then it may test 1910-1890 shortly which might create a great panic in the benchmark indices.

Going forward it’s very necessary to watch how Reliance and Nifty plays in coming days and then take a fresh call. The intermediate rally which emerged from the low of 4353 is still intact if nifty holds 4535?4490 on the closing basis.

For tomorrow support for nifty is at 4580 and one can take a chance of buying nifty at lower levels with a strict stop?loss of 4535. Resistance area is 4680?4730, unless markets break above these levels fresh buying should be avoided.

STOCK IDEA:

1) RELIANCE (1983) – If the stock maintains above 1990 then there is a possibility that we could see a pull back rally upto 2050?2100 shortly. But if it breaks below 1965 with huge volumes then the stock might test 1910?1890. Trade according to the levels mentioned. This is a high beta index stock and the whole trend depends upon this counter.

2) HINDUNILVR (262) – This stock can be bought with a strict stop?loss of 254, which is the 200?day moving average for this counter. Resistance is at 263?265, if maintains above then target looks 275?281.

3) REL CAPITAL (864) – This stock is still holding its support of 836, can be bought with a strict stop?loss of 828. The stock has the potential of again testing 880?905?950 in coming days. Technically the structure looks positive.

NIFTY FUTURE DAILY CHART (4669): The trend slightly looks nervous. Strong support is placed in the region of 4580?4515 and nifty can be bought around this region keeping a strict stop?loss of 4480. Resistance is at 4690.