Bulls Relax (Breather) or Bears Comeback (Correction)

Closing Review: 4th September
Bulls saw an obvious defeat against the Bears amid profit booking after 7 consecutive upbeats. Moreover, investors worldwide too remained cautious ahead of the ECB policy review which was due at 12.45 p.m. London time. However both Nifty and SENSEX recovered from their steep fall and ended with marginal losses. Nifty closed at 8096 i.e. down 18 points while SENSEX closed at 27086 i.e. down 54 points from the previous close.
Rupee gained momentum after the markets hours and traded at 60.28/USD. AD line showed weakness with 1246 advances and 1715 declines roughly the ratio remains 3:4.3.
Smallcap index underperformed throughout and ended with 0.8% losses while Midcap remained in line with the benchmark but recovered in the last hour to close negatively flat. Realty remained as the lead dragger and declined 4%. PSU Banks and Metal too tumbled below 1%. Pharma and FMCG were positive nearly throughout the day. Auto and Media rebounded and closed flat to positive.
Bajaj Auto, Hero Motocorp and Power Grid were the top gainers while DLF, BHEL and Jindal Steel were the top losers for the Nifty.

Option Data
Highest OI was witnessed at 8300CE & 8200CE and 8000PE and 7900PE. As per options data 8200 CE followed by 8400 CE and 8000 PE followed by 7700 PE saw highest change in open interest and are likely to remain in focus for September series.

Global Markets
European shares edged higher amid cease-fire deal between Ukraine and Russia and ECB positive expectations. According to the recent news ECB policy review pretended to be a big surprise to the street where the key interest rate was cut to a record low with a view to refrain Europe from recovery fears. Benchmark interest rate is decreased to 0.05% as against 0.15% earlier. Deposit rate is cut to -0.2% from -0.1%.
Asian shares too edged higher to head near 7 year highs amid positive expectations from the Russia-Ukraine ceasefire and expectations from the European Central Bank policy meet.
US markets were a mixed bag where Apple dragged Nasdaq to end lower by 0.56%. Dow and S&P 500 remained flat.

Market Overview for 5th September
Nifty fell as an outcome of DOJI. It also confirms the pattern and hence if profit booking continues we can see some more downside in the markets. In that case we maintain 8030-8000 provided nifty falls below 8060. However, if its just a breather for another rally in the making, then we can witness a fresh positive opening amid fresh buying. In that case 8100 breakout will be the trigger. 8140 will act as the resistance level.

Stocks to watch for: Tata Communications and NTPC on the upside while Crompton Greaves, Reliance Communication and Ranbaxy on the downside