Today, as the market participants expected the positivity witnessed in Nifty yesterday to continue, a profit taking took the index below the 7050 level, closing a good 1.65% lower, down by 118 points . The appearance of the hammer on Friday had indicated yesterday’s bullishness, however today we saw the formation of a bearish pattern on Nifty ’s chart, that is a Bearish Engulfing, which suggests that tomorrow the weakness maybe expected to continue. Another thing to take note of is the falling volumes on the chart, displayed by the histograms which suggests that everytime Nifty attempts to bounce there is very little buying interest to support it.
Other than the weakness in the Nifty 50 index, rest of the NSE indices have also shown immense pressure especially the Nifty Midcaps, which was down by nearly 3%. The BankNifty was also weak . It looked like the winners of yesterday were the losers of today. Most banks were weak, especially the Bank of Baroda who was seen trading a good 20% high yesterday, fell some 6% today.
On the list of the day’s losers we see pharmaceutical companies like strides and other banking or finance stocks .
Whereas on the winners end, none of the major companies or the Nifty50 stocks have managed to gain today.
The international markets are better off than the Indian indices. The European indices are trading in green and even the Shanghai was strong, trading 3% above its previous closing.
CHART OF THE DAY
Ashok Leyland was in news today as it has been issued a notice to end its joint venture with the Japanese auto motor maker Nissan. As a result the stock closed down by some 2.68%.
On the charts we see a downward trending channel, and today’s slide came in right at the resistance point of that channel. In addition to this there is also the Dark Cloud cover which has formed after the wide candle witnessed yesterday. A dark cloud cover is a bearish candlestick formation which indicates towards the cooling to buying interest in a stock and an onslaught of bears.