The Sensex tumbled more than 1, 000 points from its early week high of 17, 035. The index crashed to some low of 15, 988 in intra-day deals on Friday. The BSE standard index finally settled at 16, 142, with a loss of over four percent (698 points). In the last four weeks it has shed a substantial 13. 8 per cent (2, 581 points).
Among the index stocks, ICICI Financial institution and Tata Motors were the major losers, down over 11 per penny each to Rs 833 and Rs 713, respectively. Hindalco, Jindal Steel, SBI, DLF, Maruti Suzuki, Wipro, Sterlite, Infosys, Larsen & Toubro and HDFC were another major losers. On the other hand, Hero MotoCorp rallied over five percent to Rs 1, 994. Coal India, up over two per cent, was the only real other significant gainer.
The Sensex has broken one support after another, and in doing this, the resistance too has moved lower. According to the yearly Fibonacci graphs, the trend will remain negative for the rest of the year, as long as the Sensex stays below 17, 125-mark. On the downside, after having damaged the 16, 240-mark, the index is now likely to be headed in the direction of 15, 000-odd levels in the coming months.
This week, it is prone to seek support around 15, 750-15, 500 levels. And, on the upside, the index will probably face resistance around 16, 550-16, 800.
The NSE Nifty tumbled 336 factors, from a high of 5, 132 to a low of 4, 796. The actual index ended at 4, 846, with a loss of 227 points.
It's possible to see the resistance moving lower on the Nifty daily charts, if one draws a trend line from its recent a lot of 5, 702 on July 26. The immediate resistance for the Nifty has become placed around 4, 950. The index needs to break through this downward trend line to exhibit any sign of consolidation or recovery.
The markets have been in a downward spiral going back ten months, which is precisely the time they took during the 08 correction. Secondly, the index is now close to its extremely strong support degree of 4, 835, on the weekly and the monthly charts. The Fibonacci time-wise as well as value-wise targets (as explained earlier), however, indicate a major bottom somewhere within the next 11 months.
According to the time-wise theory, the next bottom will register round the 21st month, starting November 2010. This indicates a period between June in order to August, 2012.
Similarly, according to the value-wise theory, we should get to some downside target of around 13, 400-odd levels on the Sensex, and four, 000-odd levels on the Nifty. Hence, it would be interesting to see if the Nifty can sustain around the 4, 800 levels, and for how lengthy.