Retracing the fall

Markets on August 13, 2009: Sharp pull-up

Today’s session reflected the return of brave bulls, as it was a non-stop rally till the end.
Though the real picture is a bit different as today gush was just a pull-up and not a new
run in the northward direction. Currently Nifty has retraced 61.8% of the entire fall from
4731 up to 4359, which indicates that market is at a crucial juncture and as per the
retracement theory the downtrend should resume. Daily KST continues continue to
maintain its downward bias. Market breadth was positive with 1122 advances and 143
declines.

Our short-term bias is down for the target of 4325 with reversal packed at 4732. However
our mid-term bias is still up for the targets of 5000 with reversal packed at 4325.

Sensex ended the day higher by 498 points, while Nifty closed lower by 147 points.
However, the BSE-Midcap and BSE-Smallcap indices closed higher by 3.5% and 4.1%
respectively. Board based buying was reflected across the board with stocks from the
realty, metal and auto sectors leading the game. From the 30 stocks of Sensex DLF (up
7%), ICICI bank (up 7%), Maruti (up 6%) and Tata steel (up 6%) led the pack of gainers.