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Expect stocks to fall today: Mohoni

This article was posted on Jan 21, 2009 and is filed under Market Outlook

Technical Analyst, Deepak Mohoni: European markets declined further last night, and the US markets tumbled to close at 6-8 week lows. Asian markets are also down this morning, and the global decline is continuing. We can therefore expect stocks to fall again today.

The market declined on Tuesday, with the index down 229.02 points (2.45%) at 9,100.55, the nifty 49.60 points (1.74%) at 2,796.60, and the CNX Midcap 43.35 points (1.23%) at 3,491.65. The largest negative contributions to the index were from Reliance Industries (51.9 points), Bharti Airtel (29.3), ICICI Bank (24.5) and HDFC (21.3). The biggest positive contribution was 13.1 points from NTPC.

The market’s breadth was negative, with 1.37 times as many declines as advances on the BSE, and 1.82 times on the NSE. The volume in advancing issues was 27.2% (65.6%) on the BSE, and 22.9% (63.0%) on the NSE, while that in declining ones was 72.6% (34.0%) on the BSE, and 76.2% (36.9%) on the NSE.

The number of most heavily traded 240 stocks at 200-day highs were unchanged at 1, while 200-day lows rose from 5 to 8. 20-day highs rose from 8 to 10, and 20-day lows rose from 20 to 42. 5-day highs fell from 79 to 38, while 5-day lows rose from 32 to 73. The 240 Hotline stocks averaged a loss of 1.17%.

The nifty opened over 50 points lower and fell further until it reached its session low at 1040. It remained flat till 1430, then rallied to hit its high at 1505 before closing a little lower. The CNX Midcap followed a similar course, but closed near its low.

The market is being seen as going through an intermediate downtrend, even though the last 7-8 sessions have been in a relatively narrow range. The renewed global decline makes it very likely that we would see the indices break downwards from the narrow range that they are in.

There has not even been a clear cut intermediate trend for a while, with the index swinging within a 1,500 point range for the last 4-5 weeks.

The levels to be crossed for an intermediate uptrend are 9,413 for the sensitive index, 2,869 for the nifty, and 3,545 for the CNX midcap.

Most global markets are now in well established intermediate downtrends. A large number of indices are closer to their bear market lows than they are to their previous intermediate tops.

The last 2-3 intermediate tops for many markets (including ours) are around the same levels. A closing above these tops would signal a bull market. The Dow would be in one by stabilising above 10,000.

We would be in one if the sensitive index closes above 10,945, the nifty 3,241, and Midcap 3,978.

There was no change in the major trend of any of the Hotline stocks yesterday.

The FIIs sold USD 109.0 million of stocks on Monday, and are averaging daily sales of USD 86.3 million over the last five sessions. The MFs bought USD 27.7 million worth, and are averaging sales of USD 8.2 million.

Global markets are in intermediate downtrends, with many closer to their bear market lows than their previous intermediate tops.

The major trends of all global markets are down.

The Dow fell 332.13 points (4.01%) to 7,949.09, and the NASDAQ composite went down 88.47 points (5.78%) to 1,440.86

Infosys fell 5.52% to USD 26.17, Satyam lost 8.18% at USD 1.01, Wipro went down 5.71% to USD 6.77, Tata Motors fell 4.44% to USD 4.30, ICICI Bank lost 13.05% at USD 14.66, HDFC Bank went down 11.14% to USD 55.06, Dr. Reddy fell 6.04% to USD 9.18, MTNL lost 5.98% at USD 2.83, Tata Comm went down 7.45% to USD 17.40, Patni fell 1.25% to USD 4.74, Rediff lost 1.93% at USD 2.03, and Satyam Infoway went down 8.18% to USD 1.01.

source: Moneycontrol

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