The benchmark indices ended lower on profit booking and weak Asian and European cues. The sell?off was seen in shares of metal, realty, capital good, infrastructure, telecom, and oil & gas companies. Selling was across the board and all sectoral indices closed in the red.

The BSE Sensex ended down 193 points to close at 11,683 after trading in the range of 12,026?11,621. The Nifty shut at 3,554 down 66 points or 1.8% after trading between 3658?3534. Among the broader indices ? the BSE Midcap Index slipped 1.56% or 59 points and the Smallcap Index lost 2.15% or 92 points.

This is the second day we are seeing Nifty drifting lower from the top of 3717 and closing below the important level of 3615. Markets are bit choppy and will remain volatile ahead of the election results next week. Now what we are witnessing is that the momentum in the market is getting slower and as if markets are waiting for a trigger to do the momentum. This is a very crucial level from where the markets can drift 5?10% on the either side.

The outlook for the coming week is bit cautious and one should wait for the markets to settle down and then re?enter. The technical oscillators are giving a negative divergence, but nifty is still holding above its important levels of 13 – 50 and 200 day moving averages. The markets are drifting lower but the short?term trend still remains intact. We may see further weakness if Nifty breaks 3520 which is the 13?day exponential moving average and also the April’09 top for the Nifty.

For intra?day support is placed at 3520 and resistance at 3580 but major resistance zone is 3660?3720. So wait for the clear trend to emerge and then take a call on the market. Fresh building position is advisable only if nifty sustains above 3720, till then sell the rally. As the markets are placed at a very crucial level from where a sharp rally of 5?10% can take place on the either, traders need to maintain strict stop?loss as the volatility will be on the higher side. And for short?term players wait for the dip to re?enter.