MAY 10: The Sensex is breathing hard. It opened higher at 4594, some 25points above the previous close of 4579. But profit-booking struck andvalues started going down. The only difference was that the market reactedgradually. The intra-day for the index was at 4450 and the market closedwith the index at 4459.For Thursday the index could open around 4563 and then it has the potentialto move down for the day. 4361 could provide the support.
The daily stochastic indicator has signalled a sell for short term. It hascut through its triggerline. The technical pattern formation indicates thatit could take a while for the index to decide which way it should move. Ifweakness persists on Thursday the index could seek the level of 4117 byFriday. The bear trap would be at 4745. For the bear trap to happen youwould need a strong momentum. On the other hand the 4611 is likely to provea better target for booking profit or selling short. This level has moreprobability of proving itself for resistance.
As I said earlier, the index is in the midway region. It is neitheroverbought nor oversold. So both way movements are possible. But if youconsider the day over day pattern, the downward opportunity predominate forThursday.
The weakness of the market on Wednesday is revealed by the followingfigures. The number of advances went down from 717 to 622 with advancevolume shrinking sharply from Rs.1699 crore to Rs.622 crore.
The number of declines went up from 678 to 873 with decline volumesballooning from Rs.233 crore to Rs.1422 crore. The advance:decline:sameratio is 4.6:4:1.
At the NSE, the number of advances went down from 499 to 416 on the firstday of its new trading week.
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