Bounce on the cards

Markets on June 19, 2009: Weekly Evening Star

After witnessing a volatile trading session today, the Indian markets ended the day on a
strong note as buying activity increased during the final hour. Sensex ended higher by
256 points, while Nifty, closed higher by 62 points. Stocks from the mid-cap and small-
cap spaces ended the day on a positive note as well. Today’s weekly close confirmed an
Evening Star pattern (a top reversal pattern) on candlesticks chart. Further the likelihood
that this weekly Evening Star could mark a reversal has increased because the third
candlestick has closed deeply into the first candlestick’s real body. Intraday chart
suggests a falling trend line break support by a buy signal in the momentum oscillator,
which indicates that bounce up to 4400 can be expected in the coming session. Bulls steal
the market breadth with 697 advances and 541 declines.

Hourly momentum cycle has turned bullish. Our short-term bias is down for the target of
4150 with reversal packed at 4450. Also our mid-term bias is revised down for the target
of 3870 with reversal placed at 4700.

Stocks from the capital goods, metals and realty spaces managed to garner the investors’
interest. From the 30 stocks of Sensex Tata Steel (up 6%), Larsen & Toubro (up 6%) and
Tata Motors (up 5%) led the pack of gainers, while NTPC (down 2%), Tata Power (down
1%) led the pack of losers.