27 July 2015


A rocky start to the week was expected given the numerous event risks lined up for the next fortnight. Markets started the derivative expiry week on a weak note. Recommendations of the Supreme Court-appointed SIT on tightening of norms related to Participatory note (P-notes) and deep cut on global indices spooked the sentiment. Indices continue to witness selling pressure till the last leg of trade. Market again took a beating on Monday; with Sensex crashing over 551 points to 27561, its weakest closing in over five weeks. The Nifty also dipped below the 8400-level.The Sensex closed 550 points down at 27561. The Nifty ended 160 points down at 8361.
The index looks very weak. Unless it quickly recovers to levels between 8528 and 8540, there would be no redeeming feature. On the contrary, a fall below 8350 – 8320 range is likely to aggravate the problems of the bulls. A sustained campaign below the 8300-mark would pave the way for a retest of 8280 – 8250 range. In the unlikely event of a strong recovery, we need to see the index getting past 8530 through 8550 potentially strong supply zone. Any rally that fizzles out prior to decisively taking out this range would invite fresh selling by the bears. And a close above 8580 would bring the bulls back on the center stage.
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RESISTANCE: 8400, 8450, 8500
SUPPORT:  8350, 8300, 8250           

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