Engulfing bull

Markets on May 12: Bulls go mad

The Indian indices began the day's proceedings with a red tick. However, markets
bounced back in the afternoon session on account of intensified buying activity witnessed
at lower levels. The gains in the Indian markets continued until the final hour of the day's
trading session. The markets closed on a strong note with gains across the sectors. On
daily candlestick chart, Sensex has formed a Bullish Engulfing pattern. Though the
importance of this pattern is quite negligible for the reason that it is formed when the
current rally is pretty mature. So for a safer bet one should wait for a second consecutive
close in green. Respecting the demand zone around 3517, Nifty flourished 150 points
from the low of the day. On upside supply can be expected around 3750 area. Daily
momentum oscillator KST is still in the sell mode. Bulls dominated the markets breadth
with 714 advances and 495 declines.

Hourly momentum cycle has turned in the favor of the bulls. Our short- and mid-term
biases both are revised up for the target of 3750 with reversal placed at 3530 for short
term and 3515 for medium-term.

Stocks from the mid-cap and small-cap space ended with gains of 0.9% and 1.3%
respectively. From the 30 stocks of Sensex HDFC (up 8%), Wipro (up 7%), ICICI Bank
(up 7%) and Bharti Airtel (up 6%) led the pack of gainers.