The benchmark indices ended with deep cut as huge selling pressure was build since the morning session. The Sensex lost 292 points or 1.97% to settle at 14,494 and the Nifty closed at 4291 down 2.27% or 100 points. Among the broader indices, the BSE Midcap Index fell153.75 points or 2.94% and the Smallcap Index declined 2.51% or 147. Realty, metals, power and capital goods stocks were hammered intoday’s trade. Selling was across the board and the market breadth was quite negative. All the sectoral indices ended in red. The July Nifty future ended with 11 point premium at 4302. Month on month the Nifty was down 3.5%.

In today’s session what we saw was that the markets were trading under tremendous selling pressure since morning as cautious investors lightened their positions ahead of the budget. The trend has once again become shaky as the spot nifty closed below its important support level of 4310. Going forward the next important support is 4240, if that is breached then we might head for 4100 or may be to the extreme 3950.

Technically once again the picture has turned negative after today’s extreme sell?off. Now it’s very important for the nifty to sustain above 4430 which is the 21?day moving average to regain positive momentum otherwise markets could breakdown. For tomorrow the support for nifty is at 4240?4220 region a trade below these levels could bring more sell?off. And resistance is placed at 4330 and a trade above this point can bring short covering into the system.

Buying should be avoided if nifty trades below 4220.

KEY INDEX MOVERS:
1) RELIANCE IND (2023) – If maintains above 1980, then it’s a positive sign for the counter, resistance at 2045 if maintains above then it could rally upto 2110?2180.

2) SBI (1745) ? If trades below 1730 then you could see more weakness in the counter and chances are that it can fall upto 1690?1665. On the higher side if maintains above 1765 it’s a positive sign for the counter.

3) LT (1567) – Below 1545 its weak and chances that it can fall upto 1450, higher side resistance at 1610.

Nifty Future Daily chart: (4302) – If we look at the daily chart below we will notice that nifty has been consolidating for a while and trying to find direction as shown inside the circle. Now going forward we have two important levels 4150 and 4380. If nifty future breaches the above point on the either side with great volumes then only markets will find direction, until then market will trade in this range band with extreme volatility.

Fresh buying could be dangerous at this moment, wait for the clarity to emerge.