Market Outlook 07-08-2009

Strong selling pressure in the last hour of the day took Nifty to below 4600 level and finally it closed 108 points down from its previous day's close. Selling was witnessed across the sectors. On daily chart, Nifty has formed Bearish Engulfing cover with and broken the daily trendline. Almost all pivotals are looking weak on chart. Since this fall has accompanied by good volume so it take some time for Nifty to break 4750 level. On downside, Nifty has potential to come down to 4350 level (Daily trendlind line support level). Till noon, heavy weights like Reliance, Bhel, Icici Bank, Grasim, ONGC which were looking good, were bug down by the strong selling pressure. Auto and FMCG stocks like M&M, Maruti, Tata Motors, Hind Unileve and ITC which were looking weak from the start of the day, also added weakness to the market. Now the most crucial part is stayed with Reliance as it closed at neckline of inverted H&S pattern. If it manages to stay above 2060, then Nifty may get some support around 4550 level. Similarly Midcap stocks like NFCL, Chambal Fertilizer, Punjlloyd, Ashokleyland, BOI, Centurytext, HCC, Ibrealestate, IDBI, IDFC and KFA had came down heavily and they may correct more. For FRIDAY, support exists at 4551 and then at 4510. On upside, resistance exists at 4610 and 4640.