The domestic stock markets opened higher but soon declined due to selling pressure. Though short covering and buying support helped markets recover slightly from the lows, selling momentum increased in the last hour of trading due to derivative segment expiry, causing the markets to end the day with moderate losses near the lows. Technically, market breadth was negative with higher volumes, and global cues were also negative, suggesting the domestic markets may witness a flat opening with downside pressure. Key support and resistance levels for the Nifty are noted.

1. Daily Technical Outlook
26th August 2011
Indices Close % Chg. Mirroring the positive set of global market cues, the domestic
BSE SENSEX 16146.33 -0.85 markets witnessed a gap up opening. However, markets soon
S&P CNX NIFTY 4839.60 -1.01 drifted lower on back of selling pressure. Though, short
NIFTY SEP. FUT. 4864.10 -0.57 covering and buying support helped the markets bounce back
India VIX 27.94 -2.30
from lower levels, the markets failed to sustain at higher
levels. Selling pressure gained momentum in the last hour of
S&P CNX NIFTY Technical Levels trade on back of derivative segment expiry. The markets
Level 1 Level 2 Level 3
ended the day with moderate losses to close near the lows
for the day. The top losers for the day were Jindal Steel, JP
Support 4806 4757 4481
Associates, HCL Tech., HDFC Bank, Axis Bank, HDFC,
Resistance 4987 5195 5262
Ranbaxy, Infosys Tech., Tata Steel and PNB.
Volume (Lacs Shares) Technically, the market breadth remained negative
25/08/11 24/08/11 % Chg. amidst higher volumes, which is a negative sign for the
BSE 2760 2224 24.10 markets. The global market set of cues are negative. The
NSE 7393 5583 32.44 domestic markets are likely to witness a flat opening. The
Total 10153 7807 30.06 Nifty has managed to sustain above its support level of
Source – BSE & NSE 4806. However, the prevailing technical negatives
continue to hold good and would put pressure on the
Turnover ( ` Crores)
bourses. The Nifty continues to trade below its 200-day
25/08/11 24/08/11 % Chg.
SMA. Further the 50-day SMA remains placed below the
BSE 2438.34 2204.92 10.59 100-day SMA. The Nifty remains placed below the
NSE 13387.74 9631.87 38.99 February’11 ascending trendline. The RSI, MACD and
NSE F&O 225779.14 179528.54 25.76 KST are placed below their respective averages. The -DI
Total 241605.22 191365.33 26.25 and the ADX lines are placed above the 36 level,
Source – BSE & NSE indicating sellers still have an upper hand. The +DI line is
Market Breadth (NSE)
flattening out. The KST and MACD are placed in the
negative territory. These conditions would result in
Advances 492
selling pressure. However, the MACD, RSI and KST are
Declines 962
placed in the over sold territory on the daily charts. The
Same 60 Stochastic is placed above its average. These conditions
Total 1514 would lead to regular bouts of short covering and buying
A/D Ratio 0.51 : 1 support leading to relief rally. The market sentiment
Source – NSE remains tentative. The markets will display volatility as it
Moving Averages S&P CNX NIFTY tries to sustain above the 4800 level. In the meanwhile
50 Day SMA 5383.15
the markets would take cues from the global markets.
◄Negative The support levels for Nifty are placed at 4806, 4757 and
100 Day SMA 5499.75
4481. The Nifty faces resistance at the 4987, 5195, 5262,
200 Day SMA 5612.92 ◄Negative
5364 and 5500 levels.
Intra-day Resistance Intra-day Support
Indices Close Pivot Point R1 R2 R3 S1 S2 S3
BSE SENSEX 16146 16208 16312 16478 16747 16043 15939 15669
S&P CNX NIFTY 4840 4860 4895 4951 5042 4804 4769 4679
NIFTY SEP. FUT. 4864 4877 4906 4948 5019 4835 4806 4735
Sanjay Bhatia (AVP – Technicals), Email Id sanjay@keynotecapitals.net Yahoo Chat Id: keytechnicals@yahoo.in
Keynote Capitals Ltd.
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4 Floor, Balmer Lawrie Bldg., 5, J. N. Heredia Marg, Ballard Estate, Fort, Mumbai, India – 400001. Tel: 3026 6000 / 2269 4322
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2. Short Term Trading Ideas Based On Technical Analysis (5 - 7 Days)
Stop
Initiation Stop Loss Target
Stock Close Action Price Loss * (%) Target (%) Remarks
Allahabad Bank 173.70 Sell Below 173.00 174.50 0.87 170.00 1.73
TGT of 58
Achieved
given @ 63
DCHL 52.40 Sell Below 51.50 53.50 3.88 47.00 8.74 on 25/08/11
Dish TV 76.70 Sell Below 75.00 77.00 2.67 71.00 5.33
* Stop Losses are to be considered on Closing basis only.
Keynote Capitals Ltd.
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4 Floor, Balmer Lawrie Bldg., 5, J. N. Heredia Marg, Ballard Estate, Fort, Mumbai, India – 400001. Tel: 3026 6000 / 2269 4322
www.keynotecapitals.com

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