Bear stance intact

Markets on July 1, 2009: Sell at 4370

Although the Indian markets remained choppy during the day, they managed to end the
day in green. Sensex ended with gains of 151 points, while Nifty ended higher by 49
points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note as
well, recording gains of 1% and 0.3% respectively. The overall day of bulls was just a
pullback to the previous trend line break, which is a good trading opportunity to go short.
Hurdle of 20-hourly simple moving average is still intact. Upside resistance is still
pegged at 4370, where traders should look for building fresh short positions. Daily
momentum cycle is still in the sell mode. The overall market breadth was in the favor of
the bears with 612 declines and 597 advances.

Intraday KST continue to maintain its bear stance. 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.

Apart from stocks from the consumer durables space, buying activity was witnessed in
stocks across the board, led by the realty, banking and auto spaces. From the 30 stocks of
Sensex DLF (up 5%), Mahindra & Mahindra (up 3%) and Reliance Infra (up 3%) led the
pack of gainers, while Hindalco (down 4%) and ONGC (down 1%) led the pack of losers.