Market Scenario 24/07/12

The markets closed with significant declines today with metal, infra and capital goods being the worst performers. Europe, too, didn't come to the rescue of the markets and pulled the indices down.

The market breadth was negative with advances at 331 against declines of 1106 on the NSE. The top Nifty gainers were Dr Reddys Lab, Cipla and ONGC while losers included Maruti, JP Associates, Sesa Goa and Sterlite Industries.

Markets are displaying weakness owing to host of factors like rise in inflation, crude oil prices, depreciation of rupee and uncertain political scenario. Markets may move in a narrow range with downward bias.

Technical Analysis: The Sensex closed at 16877, down 281 points from its previous close, and the Nifty shut shop at 5118, down 87 points. On the higher side 5150 and 5200 are the strong resistance levels while 5100 and 5050 are the strong support levels.

Suggested Strategy: The markets are moving in a downward direction owing to uncertainty on the political front, depreciation of rupee, high level of inflation and rise in crude oil prices. The trend may continue for some more time. Buy on declines and sell on rallies should be the strategy.