The domestic stock markets witnessed declines, mirroring weak global cues. Selling pressure continued through the day, though short covering and selective buying later helped trim some losses. The markets closed with moderate declines near the day's highs. Technically, market breadth was subdued on lower volumes and indicators pointed to further selling pressure at regular intervals. Support levels are at 5364, 5262 and 5195, while resistance is at 5500, 5600 and 5695.

1. Daily Technical Outlook
4th August 2011
Indices Close % Chg. Mirroring the weak set of global market cues, the domestic
BSE SENSEX 17940.55 -0.94 markets witnessed a gap down opening. Sustained selling
S&P CNX NIFTY 5404.80 -0.95 pressure continued on the bourses as markets failed to show
NIFTY AUG. FUT. 5424.40 -0.78 any resilience. However, short covering and selective buying
India VIX 19.48 1.72
support helped the markets bounce back from lower levels in
the afternoon session. The markets ended the day with
S&P CNX NIFTY Technical Levels moderate losses to close near the highs for the day. The top
Level 1 Level 2 Level 3
losers for the day were L&T, Powergrid, Axis Bank, Tata
Motors, DLF, Jindal Steel, M&M, ICICI Bank, Bajaj Auto and
Support 5364 5262 5195
TCS.
Resistance 5500 5600 5695
Technically, the market breadth remained subdue amidst
Volume (Lacs Shares) lower volumes. The global market set of cues are
03/08/11 02/08/11 % Chg. inconclusive. The domestic markets are likely to witness
BSE 2246 3014 -25.48 a flat opening. The Nifty continues to trade below its 200-
NSE 5772 5029 14.78 day SMA. The 50-day SMA remains placed below the 100-
Total 8018 8043 -0.31 day SMA. The MACD, RSI and KST are placed below their
Source – BSE & NSE respective signal and trigger line. Moreover, the KST and
MACD are placed in the negative territory. These
Turnover ( ` Crores)
conditions would result in selling pressure at regular
03/08/11 02/08/11 % Chg.
intervals. The +DI and the ADX line are moving
BSE 2576.76 2451.52 5.11 downwards, while the -DI line has started moving higher
NSE 10601.41 9568.18 10.80 and is on threshold of a breakout. The only silver lining
NSE F&O 104008.08 95800.63 8.57 for the markets remains the Stochastic, which is placed
Total 117186.25 107820.33 8.69 above its average and in the over sold territory on the
Source – BSE & NSE daily charts. This would result in regular bouts of short
Market Breadth (NSE)
covering and buying support at lower levels. The market
sentiment remains negative. Now, it is important that the
Advances 519
Nifty witnesses regular buying support and moves and
Declines 933
sustains above the 5500 level. Incase the Nifty trades
Same 65 below the 5500 level for further two trading days then
Total 1517 increased selling pressure is likely to be witnessed. In
A/D Ratio 0.56 : 1 the meanwhile the markets would take cues from the
Source – NSE news flow on the progress of monsoon, crude prices and
Moving Averages S&P CNX NIFTY the global markets. The support levels for Nifty are placed at
50 Day SMA 5524.52
5364, 5262 and 5195. The Nifty faces resistance at the 5500,
◄Negative 5600, 5695, 5885 and 5911 levels.
100 Day SMA 5580.29
200 Day SMA 5693.34 ◄Negative
Intra-day Resistance Intra-day Support
Indices Close Pivot Point R1 R2 R3 S1 S2 S3
BSE SENSEX 17941 17935 18011 18082 18228 17865 17789 17643
S&P CNX NIFTY 5405 5402 5425 5446 5490 5382 5358 5315
NIFTY AUG. FUT. 5424 5416 5445 5466 5516 5395 5366 5316
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)
Initiation Stop Stop Loss Target
Stock Close Action Price Loss * (%) Target (%) Remarks
Bharat Electron. 1667.95 Sell Below 1660.00 1687.00 1.63 1600 3.61
Biocon 351.60 Sell Below 351.00 357.50 1.85 337 3.99
Cummins 609.10 Sell Below 605.00 616.50 1.90 580 4.13
* Stop Losses are to be considered on Closing basis.
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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