Nifty ended the final session of the week with marginal gain of 0.13% to close a shade below the 7500 mark thus rising for four straight sessions. The index opened at the day's high of 7505 and traded in a narrow range thereafter consolidating some of the gains of the week. For the week though the index has rallied a whopping 10% from the low of 6825. Trading volumes clocked at slightly below average levels whereas the market breadth ended 9:5 in favor of advancers. Volatility (India VIX) has slipped down to 17.9% and is likely to remain in a range of 17-21% in the short-term. We continue to believe that rallies/retracements at this rapid pace off 52-week lows typically see roadblocks at 10-12% mark. Short-term momentum has moved in favor of bulls for however the hourly readings are now into overbought threshold and will eventually lead to a period of correction / consolidation. Nifty is now headed into a resistance cluster of 7535-7575 where the 4-month falling trend line will cap further upside. It is prudent to fade any further rallies and play for downward retracement. The 21 DEMA at 7250 will act as a crucial support.
A mixed trend was seen among sectoral indices led by gains in Metals (+2.15%), Banking (+1.3%) and Power (+1.19%); whereas losses were seen in Telecom (-0.7%) and IT (-0.45%) indexes. Broader market Mid-cap and Small-cap indices managed to outperform their frontline peer with gains of +1.13% and +0.75% respectively.
Bullish Setups: AXSB, LT, MSIL, ACEM, BHFC, TVSL, HEXW
Bearish Setups: PCJ, APNT, APHS, EIM
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 7485 |
| Resistance 1 | 7512 |
| Resistance 2 | 7575 |
| Support 1 | 7420 |
| Support 2 | 7380 |
| Nifty 20 SDMA | 7174 |
| Nifty 50 SDMA | 7420 |
| Nifty 200 SDMA | 7948 |
| Adv : Dec [NSE] | 959 : 597 |
| Turnover Rs Crs. BSE+NSE cash | 21,427 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bullish |
| Stochastic | Bullish (OB) |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Fade the rally " (08-Mar-16-EDEL)
Regards,
Tejas J. Shah +91 22 4063 5534
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