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Below are Views On Markets corrected sharply on Friday after three sessions of gains By Mr. Subash Gangadharan, Senior Technical & Derivative Analyst, HDFC securities

Markets corrected sharply on Friday after three sessions of gains. The Nifty finally lost 143.8 points or 0.95% to close at 15,031. Broad market indices like the BSE Mid Cap index lost less, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Sectorally, the top gainers were the BSE Power, CD and Oil and Gas indices. The top losers were the BSE Auto, Energy, Bankex, FMCG and Metal indices.

Zooming into the 15 minute chart, we can see that the Nifty opened today with an up gap. But it was unable to sustain at the highs of the day as selling pressure emerged and pushed the index lower into negative territory. The Nifty also closed below the 20, 50 and 200 period moving average on the 15 minute chart, indicating that the bears have an upper hand for the very near term.

On the daily chart, while the Nifty remains in uptrend, it has closed just above the 20 day SMA, implying that the coming week's price action will be crucial for the future direction of the market. A close below the 20 day SMA and immediate support of 14919 is likely to trigger a further correction which could take the Nifty towards the next major supports of 14680-14467.

Conclusion: The near term trend has turned weak with the Nifty failing to sustain at the highs of Friday and correcting sharply to close below the 20, 50 and 200 period moving average on the 15 minute chart.

On the daily chart, while the Nifty remains in uptrend, it has closed just above the 20 day SMA, implying that the coming week's price action will be crucial for the future direction of the market. A close below the 20 day SMA and immediate support of 14919 is likely to trigger a further correction.

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