Bearish patterns emerge

The market fell sharply as huge selling emerged in frontline stocks as the Sensex plunged 368.84 points or 1.02 per cent to settle at 35,656.70, its lowest closing level since January 3. The Nifty 50 fell 119 points, or 1.10 per cent, to settle at 10,661

The BSE Mid-Cap Index fell 1.84 per cent while the Small-Cap lost 1.99 per cent. Among sector indices on the BSE, Basic Materials (down 2.09 per cent), Healthcare index (-2.08 per cent) and Bankex (-1.86 per cent) underperformed the Sensex.

Index heavyweights Reliance Industries lost 1.34 per cent to Rs 1,229.60, HDFC lost 1.47 per cent to Rs 1948.60 and ITC dropped 1.65 per cent to Rs 274.65.

Technical view

Sameet Chavan, chief analyst-technical & derivatives, Angel Broking, said: “The Nifty has negated the recent 'Bullish diamond' pattern and in the process went on to slide marginally below the 'Upward Sloping trend Line' level of 10,675. For the day,

the low made on January 4 provided some support for the index and, hence, going ahead, it would be crucial to see how things pan out around it. A sustainable breach below this level would reinforce the selling pressure to test sub-10,600 levels. On the flip side, If the Nifty manages to stay beyond 10,695, we may see some bounce back move towards 10740 - 10780 levels.

Market view

Jay Thakkar, head-technical & derivatives research & AVP-equity research, Anand Rathi Shares & Stock Brokers, said:  Nifty closed deeply in the negative territory in the last trading session and the lower tops

and lower bottom formations continue to form on the daily charts. The momentum indicator has gone into sell mode, which is also a negative sign. The Index has formed a double top pattern which is a bearish reversal pattern and the breakdown

of the same will be 10,534 levels. Below 10,534 levels the Index is expected to fall till 10,300 levels. The resistance on the upside is pegged at 10,761 and above that at 10,803 levels.

—Ashwin Punnen