The benchmark indices ended lower inline with the global peers as huge cut was seen in most of the Asian markets. The Sensex closed at 13,400 down 104 points, after seeing a recovery of 180 points from an intraday low of 13,219. The Nifty fell 0.75% or 30 points to settle at 3,974, after a recovery of 55 points from day's low of 3,918. Among the broader indices ] the BSE Midcap Index was down 2.84% or 133 points and Smallcap Index lost 3.38% or 176 points. Selling was seen in metal, realty, telecom, capital goods, power and auto stocks while slight recovery was seen in technology and banking stocks. The market breadth was extremely weak and the total turnover dropped
12.6% to Rs 67,617 cr. as against Rs 77,419 cr.

The intermediate trend still remains bearish but in the very near term markets look oversold after a huge sell]off of almost 560 points or
12.5% from the recent high of 4480 to todayfs low of 3919 in a short period of time. Hence selling around the 3900 mark should not be sensible as the reward ratio would not be favorable. Even on the F&O side the PUT Call ratio is around 0.83 which is also suggesting a possibility of a small pull back in coming days.

These pullbacks will be short]lived and traders can sell the rally in the region of 4080]4140 keeping a stop]loss of 4160. Weak global cues also maintain pressure on Indian market which is keeping the market mood subdued. The RSI on the daily chart is at 37, indicating that there is still more room on the downside. This downtrend could turn positive only if nifty maintains above 4240 will huge volumes and positive market breadth. Till then every rise is a selling opportunity.

On the downside there is a possibility of nifty touching 3730]3610 in the near term but these falls should be utilized as a buying opportunity from an investment perspective. And on the higher side 4140]4240 is a strong resistance area.