Startling Oil Spill on NSE - Exclusive - AP

Humpty Dumpty (bulls) sat on a wall; Humpty Dumpty had a great fall.

The battle on the edge of the cliff was clearly won by the bears yesterday, and the bulls gave up without a fight. This, in a nutshell, is the story of what happened yesterday. But, there seems to be more than meets the eye: All the TV channels and business newspapers say the Nifty fell by 78.9 points to close at 4946.55, but what you cannot see, and only chartists can decipher, are the market internals.


I am presenting a startling piece of information below, revealed only on Bhoomitrader, and this pertains to one of the topmost stocks in terms of Nifty weightage: ONGC.

• Traded volumes on ONGC yesterday were the 3rd highest ever in its history;
• Volumes were the highest since April 27, 2006;
• 86,12,528 shares were traded in ONGC yesterday, way above average daily volumes;
• Turnover in ONGC alone accounted for Rs 778 crore in NSE cash segment;
• Volumes in ONGC were 2301% above the 5-day average of 3,58,767.

This is not all. Out of the 86,12,528 shares traded in ONGC yesterday, 76 percent of this volume was traded in just 2 trades, during the day - first at 12.59 pm 45,15,526 shares (52 percent) and the other at 3.24 pm which saw 20,11,558 (24 percent). These 2 trades alone accounted for a turnover of Rs 600 crore.

In spite of such huge volumes, ONGC fell only from 910 to 900 in the first trade, and then 901.95 to 900, in the second trade. Moreover, there was hardly any change in volumes in ONGC futures, pointing to the fact that there was no corresponding hedging or arbitrage operations.

(Readers are requested to post their views on this amazing volume shocker)

Back to Markets

Coming back to our markets, what now, after the fall from the edge of the cliff? Interpreting a chart is like figuring the optical illusions that one often receives in email. You see some concrete facts, and then leave the others to your imagination skills.

I can see 2 scenarios, as mentioned on the chart. Nifty can take support either at 4910-4915, or finally at 4800-4810. If 4800 does not hold (in my view, quite unlikely), then we might be going straight towards 4470-4200. The bullish view is that if 4910 holds, we could see a good bull run, which if 5200 is crossed, could go all the way up to 5925. Such an expectation should be for a period of weeks, and not days, as some of our trading friends tend to expect.

One may start buying Hindustan Unilever, with a stop loss of 225, for a good move in the next couple of weeks.