20-DSMA Holds

Markets on June 16, 2009: Momentum turns positive

Constant buying activity during the second half of today’s trading session led the Indian
markets to make a late recovery. However, profit booking led the indices to shed a
portion of their gains during the final minutes of trade. Sensex ended the day higher by
82 points, while Nifty closed higher by 33 points. Stocks from the mid-cap and small-cap
spaces ended the day on a positive note, recording gains of 2.21% and 2.13%
respectively. Today positive close suggest that Nifty has respected the support of 20-daily
simple moving average (20-DSMA) and from here northward move seems to be obvious.
During the day Nifty saw demand coming near the psychological mark of 4400, after
which we saw a break above the falling trend line, which is a bullish signal. The overall
advance to decline ratio was poised at 4 to 1 on the BSE.

Hourly KST has given a buy signal. Our short-term bias is revised up for the target of
4636 with reversal packed at 4365, while our mid-term bias remains intact for the target
of 4850 with reversal packed at 3861 respectively.

Barring stocks from the energy sector, buying activity was witnessed in stocks across the
board led by banking, power and metals. From the 30 stocks of Sensex Reliance Infra (up
6%), State Bank Of India (up 4%) and Jaiprakash Associates (up 4%) led the pack of
gainers, while Sterlite Industries (down 4%) and Reliance (down 2%) led the pack of
losers.