Indian markets drifted lower owing to weak global downside pressures with Nifty losing 1.26% in trade yesterday to close near 7350 levels. The index opened with a large down gap and traded in a narrow range for large part of the session except in the final 30 mins that saw renewed selling resulting in a lower low for the day. Trading volumes clocked at below average level whereas the market breadth was extremely weak at 1:6 in favor decliners. Volatility (India VIX) has ticked up to 18.60% and is gradually making a move higher. Nifty has managed to close below its 12 day SMA 7419 thus the short-term uptrend has been violated. However it has managed to retrace approx. 66% of the up move and could exhibit a rebound move as 7400 is a support based on options open interest concentration. Momentum oscillators are now showing mixed readings with MACD triggering a buy crossover and RSI has rolled bearish. We prefer to have a Neutral near-term stance and would be prompt to turn back bullish above 12 DSMA or look for a decline on breach of 7300.
Trend among sectoral indices was secularly bearish and was led by losses in Power (-4.1%), Cap Goods (-2.8%) and Realty (-2.6%); whereas marginal outperformance was seen in defensive FMCG (-0.3%) and Healthcare (-0.75%) indexes. Broader market Mid-cap and Small-cap indices underperformed their frontline peer with losses of -1.3% and -2.25% respectively.
Bullish Setups: TCS, INFO, RIL, ACEM, AXSB, BHARTI
Bearish Setups: MSIL, RCAPT, JUST, UBBL, JETIN, TATA
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 7361 |
| Resistance 1 | 7405 |
| Resistance 2 | 7436 |
| Support 1 | 7327 |
| Support 2 | 7300 |
| Nifty 20 SDMA | 7477 |
| Nifty 50 SDMA | 7683 |
| Nifty 200 SDMA | 8068 |
| Adv : Dec [NSE] | 211 : 1359 |
| Turnover Rs Crs. BSE+NSE cash | 18,964 |
| Oscillators | Comments |
| RSI | Bearish |
| MACD | Bullish |
| Stochastic | Bearish |
| DMI & ADX | Bearish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " 7400 pivot to watch for " (04-Feb-16-EDEL)
Regards,
Tejas J. Shah +91 22 4063 5534
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