Supports at lower level

Markets on February 11: Smart recovery

In spite of the panic in US markets last night, the Indian markets did not witness a major
sell off. On the other hand the Indian markets managed to make a smart recovery during
the second half of today’s trading session. Finally Sensex closed lower 29 points, while
the Nifty closed lower by 9 points. However, stocks from the mid-cap and small-cap
indices ended the day in the positive. On daily candlestick chart, Sensex has formed a
Closing Marubozu candle, which is considered a strong candle and bulls are safe until
today’s low gets breached. Further on daily chart market jumped back into the corner of
the bulls just after kissing the neckline of inverted Head & Shoulder. Also market
respected the supported of 40-days exponential moving average. On hourly chart, Nifty
did not break the wall of hourly averages and started upward journey just after taking the
support at 20-hourly simple moving average. Up trend of daily KST is still intact. Market
breadth that was negative in the morning session turned into the favor of the bulls as the
session ended.

On hourly chart, the gap between the momentum indicator KST and signal line is getting
slimmer. Our short-term bias is up for the target of 3000 with reversal packed at 2752.
However our mid-term bias is still down for the target of 2450 with reversal packed 3111.

Stocks from the metal, healthcare and energy space led the pack of losers today, while
stocks from the auto and power sectors led the pack of gainers. From the 30 stocks of
Sensex Maruti (up 4%), ACC (up 3%) and Jaiprakash associates (up 2%) lead the pack of
gainers. On the other hand Ranbaxy (down 5%) and Grasim (down 4%) lead the pack of
losers.