Sensex, Nifty closes higher - Angel Broking

Yesterday, markets opened marginally higher neglecting negative cues for other major Asian bourses. During the midsession, indices rallied gradually to post a high of 18801 / 5666. However, we witnessed massive selling pressure near day's high, which eventually dragged indices to close just above the opening point of the day. The Oil & Gas, Capital Goods and FMCG counters ended with modest gains; whereas the Power, Consumer Durable and Health Care sectors remained under pressure throughout the session. The advance to decline ratio was strongly in favor of declining counters. (A=981 D=1313) (Source- www.bseindia.com)

Formation

- The '20-week EMA' and the '89-Week EMA' are placed at 19230/ 5825 and 18456/ 5585 levels, respectively.

- The '89-day EMA' and the '200-day SMA' are placed at 19343 / 5860 and 19172 / 5815, respectively.

- The weekly 'RSI-Smoothened' oscillators, the 'ADX (9) indicator and '5 & 20 EMA' are now signaling a negative crossover.

Trading strategy:

Yesterday, in line with our expectations, the lower end of the 'Downward Sloping Channel' provided decent support for our market. During the midsession, indices rallied nearly a percent on the back positive placement of hourly 'RSISmoothened' oscillator. However, selling pressure near day's high resulted in sharp decline towards the latter part of the session. The daily chart now depicts a 'Long Legged Doji' Japanese candlestick pattern. The said pattern indicates uncertainty among the market participants and the possibility of the change in the direction. However, the pattern would be confirmed only if indices sustain above yesterday's high of 18801 / 5666. In this scenario, indices may bounce towards 18890 - 19000 / 5705 - 5750 levels. On the flipside, the said pattern would be negated below the low of 18487 / 5570. A fall below 18487 / 5570 may result in further declines towards the 18300 / 5500 mark.

Source : Equity Bulls

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