Resistance at 20-DSMA

Markets on June 30, 2009: Violation of bullish trend line

The Indian markets continued to tank as selling activity persisted till the final minutes of
trade. Sensex ended lower by 291 points, while Nifty closed lower by 99 points. Stocks
from the mid-cap and small-cap spaces ended the day on a weak note as well. On daily
chart, Nifty failed to clear the hurdle of 20-daily simple moving average (20-DSMA),
which indicates that bearish sentiments are overcoming the bullish one. On the other hand
the streak of higher lows on daily chart got disrupted, which also points towards a bearish
scenario. After today’s monthly negative close after 3 months of strong bullish close, the
bullish trend is under treat. Further the bearish scenario gets tighten after the break of
bullish trend line on hourly chart. Daily momentum cycle is still in the sell mode. The
overall market breadth was in the favor of the bears with 998 declines and 226 advances.

Intraday KST has also shifted in the corner of bears. Our short-term bias is revised down
for the target of 4000 with reversal packed at 4440. Also our mid-term bias is intact on
the downside for the target of 3870 with reversal placed at 4700.

Selling activity was witnessed in stocks across the board today, with the pack led by
stocks from the realty, metal and capital goods sectors. From the 30 stocks of Sensex
Hero Honda (up 1%) led the pack of gainers, while DLF (down 8%), Tata Motors (down
7%) and Jaiprakash Associates (down 7%) led the pack of losers.