Infy, Candlesticks and RSI

Today is the Infy results and will have some definite impact on the market.

Market recap:
The DOW and FTSE had a bad day today and down almost 1.2%. The resistance that we have been talking abt, came into effect and sent the markets tumbling. In addition, we feel that this is definitely the start of the correction and as can be marked on the charts, the logical first target will 13000(38.2%). Also take a look at the RSI. The band, as shown in the chart, has been acting as a resistance and support. So far the resistance has worked. Will the support work? Refer the chart for more details

The Nikkei and Hangseng, though down almost 200 points at one time, have recovered marginally.



India:
Today is the big day - Infy results. That being the case, the global markets are sure to put pressure as well as we were at strong resistance.

In addition to the resistance, take a look at the candlesticks. We had a doji(Point B) and a bearish engulfing (Point A and B). Both are bearish patterns and go in line with our bearish view. Notice the candlestick pattern once the RSI starts moving down - Doji and bearish engulfing in both the cases. Refer the chart for more details.

Depending on price behaviour we might build short positions today. We expect the market to hold up in the morning because of the Infy results and then subsequently go down. If that is the case, we can build some short positions today.