Mar 202011

If you thought the key price action of last week's trading activity in the Indian bourses was Reliance's drop on Friday, that is not entirely true. The CNX IT index's steady price erosion over the last week is actually more important.

CNX IT Index - Daily Chart

All through the corrective declines since the March 09 bottom, not once did this index drop below the 200 DMA. Yet another, sign that this is not a mere correction.

Infosys, the technology heavy weight has an interesting price chart.

Infosys - Daily Chart

The stock gapped below its 200 day moving average on Thursday and ended the week firmly below this level.

Reliance the stock on which the hope's of the bulls are pinned, established a firm downward sloping trendline and the stock has started to drop strongly.

Reliance - Daily Chart

While the talk of the week was the apparent resilience of the Indian market during a crisis , it was actually the bears who were scoring.  This is the first time since 2008 that all the sectoral indices  are trading below their respective 200 DMA!!

Feb 282011

When Reliance announced the deal with BP there was quite a bit of excitement amongst the analyst community. Some even thought this was a game changer for the stock. But here is the stock dipping under the pre-deal announcement levels.

Reliance - Daily Chart

If the stock closes Rs 10 under Friday's close, the deal essentially would mean nothing for the stock! What is quite obvious from the chart is that the gap resulted on February 22nd is nothing but a common gap and has very little potential, if any, to reverse the down-trend of the stock.