Welcome to the end of the day report.
The markets today collapsed during the first half of the session but during the second half of the session we saw some stocks recover and even do very well. The outliers today were the cement stocks and the IT stocks which managed to close well above the lows in fact IT stocks closed in the green along with the cement stocks.
If one saw the Infosys chart and the NASDAQ chart you will notice a lot of similarities. Both the charts are showing positive divergence and both of them are at some sort of a support. The same can be said of the ramco cement and shree cement which are cement stocks sitting at some long term supports and also showing some positive divergence on the 2 hour charts. Despite the fall today both the sectors and the stocks outperformed which would lead want to think that when the market stops falling or turns around they could be the leaders.
The other noticeable thing today was the mid cap and small cap stocks and the indices making a bullish pattern on the candle sticks which is known as the bullish engulfing pattern. This pattern is often a bullish pattern which occurs after a downtrend and can be a short term reversal pattern. Combining this with the fact that today we got a lot of selling and the momentum oscillators are extremely oversold one can argue that a small bounce maybe in the offing.