The NSE Nifty has flattered to deceive, as the long drawn out resilience has turned out to be a fallacy. A breakdown below the 5155-5182 mark has finally given a directional bias to the market, and a rather clear one, i.e. downward. The short-term trend has clearly turned negative, and the decline has been sharp and swift as a direct consequence of the 11-week sideways movement, which in hindsight, can be termed as a distribution pattern. A rather deeply oversold situation could result in a recovery. However, it remains to be seen whether this anticipated bounce will sustain or not, as the underlying trend has turned distinctly weak while support comes in at the 4835 and 4750 levels.

The Mid- and Small-Caps have been reflecting a similar weakness, as they too have given downward breakouts, with the latter a wee bit better than the former. Banks have virtually collapsed and Capital Goods have also continued to remain weak. Consumer Durables have clearly been better over the last fortnight, while FMCG has wilted a bit but has still been relatively solid. Pharma too has been one of the better sectors. IT, however, continues to flounder. Metals have been slipping again, and Realty continues to gradually decline.

The Nifty has finally given a downward breakout. While important levels have been broken on the downside, indicating the possibility of a further fall, a recovery of sorts could be on the horizon sooner rather than later.