The benchmark indices ended lower today for the third consecutive day despite strong gains in other Asian markets. The Sensex fell 150 points to close at 15,009 after hitting an intra?day low of 14,902. The Nifty shed 43 points to finish at 4,437 after hitting a low of 4,399. The broader indices underperformed the benchmark indices, slipped 1.7?2%. The markets plunged due to monsoon worries; auto and FMCG stocks were badly hit. Selling was across the board in capital goods, cement, power, telecom, banking and oil marketing stocks, except technology stocks witnessed buying interest throughout the day. The Aug Nifty future ended with 49 points discount at 4,388.

This has been a third consecutive sharp fall due to monsoon concerns. Today’s fall was very sharp and was triggered in the last half?anhour of trade. In the last 3 days nifty has corrected almost 6.5% from the top of 4718 in a very short period of time. Auto and FMCG stocks were badly hit during this period.

The outlook continues to remain cautious as the trend is getting weaker and selling pressure is build?in at higher levels. Nifty is still holding its 50?day moving average of 4410 on the closing basis which is a positive sign for the market. But technically nifty is placed at the lower end of the channel from where a sharp fall could be seen if we decisively trade below 4380.

For tomorrow’s intra?day trade if nifty breaks 4380 then only we could witness more selling pressure and we may test 4330?4180 levels shortly but if we manage to trade above 4480?4520 then we could witness some positive moves. Unless we see a break above 4550?4600 this trend will remain weak and one should sell on every rise.

INDEX PIVOTAL:

1) AXIS BANK (843) – Huge short covering was seen in the counter after a strong correction of almost 22% from the top of 974 to today’s low of 797. This stock can bought on dip with a stop?loss of 810, resistance is at 850, if maintains above then look for a target of 880?920.

2) RELIANCE (1988) – This counter is trading at a very crucial level and holding its important support level of 1970, if this point is decisively broken then we could see a level of 1940?1905. Strong resistance at 2030, unless we see a break above this level we don’t see any positive development.

Nifty future daily chart: Nifty future has closed with a discount of 49 points at 4388. As we had mentioned that below 4480 this trend will get negative and a possibility of testing 4350?4315 becomes higher. Buying is not sensible as nifty is placed at the lower end of the channel from where 4170?4140 is also possible. So wait for the markets to settle down and then look for the buying opportunity.