Markets in sell on rise mode

The markets tried their best to edge higher in the early part of the trading week, but eventually fell apart following earnings disappointment from Infosys. The BSE benchmark index had managed to close at a fresh three-month high at 17,618 on Tuesday. However, thereafter the index tumbled to a low of 17,181, down 450 points from the week’s high of 17,631. The Sensex eventually ended with a loss of 307 points at 17,214.

Among the Sensex stocks, Infosys and Wipro slumped over eight per cent each to Rs 2,228 and Rs 359, respectively. Jindal Steel and Power, Tata Steel, Tata Power Co, Bharti Airtel and Sterlite Industries were the other major losers. On the other hand, Oil and Natural Gas Corp gained two per cent at Rs 285. Gail (India) and Dr.Reddy’s were the other notable gainers.

As per the monthly Fibonacci chart, the Sensex has yet not given any indication so far. However, the momentum oscillators are not in favour of an upside, hence we could see downward pressure in the near term.

On the downside, the Sensex has near support around 17,050-odd levels, below which the index can drop to 16,780 for deeper down to 16,375. Whereas, on the upside, the Sensex is likely to face considerable resistance around 17,430-17,500.

The NSE Nifty moved in a 130-odd points range. The index touched a high of 5,349, and a low of 5,217, before settling with a loss of 90 points at 5,227.

The NSE index has currently managed to stay afloat its short-term moving average, which is at 5,210. However, the MACD and the Stochastic Slow both are in favour of the bears on the daily charts. Hence, the index may find it difficult to sustain at higher levels.

Also, in case, of an up move the index now has multiple resistance above the 5,300-level. The Nifty is likely to face strong resistance in the range of 5,315-5,350.

The weekly charts is also showing some signs of tiring. As per the weekly charts, the index has near support around 5,170, below which the index can slide to 5,090-odd levels.

Clearly, the momentum seems to be in favour of the bears. Hence, the markets look more like a sell on rise mode.