A day after closing to cycle highs of 7979, Nifty fell a substantial 1.66% to close below 7850 on April series derivatives expiry session perhaps signaling a near-term top. The index opened on a flat note and traded in a narrow range of 33 points and thereafter began to spiral down breaching the 21 & 50 hourly EMAs till close and managed to end slightly above the nearest 12 day SMA support of 7839. Daily chart exhibits a large bodied bearish candlestick pattern coupled with significantly above average volumes owing to the expiry thus suggesting a possible reversal in the short-term trend. Market breadth too ended weak at 4:11 in favor of decliners whereas the volatility (India VIX) was unchanged at 16.6% despite passage of two key events. Momentum oscillators have once again rolled bearish on the hourly scale while the daily oscillator readings have dropped considerably and threatening to roll down on further weakness. Failure to break past the psychological and technical resistance of 8000 Nifty is ripe for a corrective phase of the entire rally from the low of 6825 to 7992. On a weekly close below 7900 the index will also end in the negative marking an end to the short-term up cycle and ready to retrace the two-month rally. Below 7822 the index will confirm a bearish short-term trend with some support pegged at the 21 day EMA of 7774; and hence it is prudent to sell minor rallies to 7900 with stop-loss of 8000 and expect 7500 and 7400 targets.
Barring a gain of 1.68% in Realty index, all other sectoral indices ended the session in red and were led by losses in Oil & Gas (-2.2%), Metals (-2.16%) and Power (-2%) indices. Broader market Mid-cap and Small-cap relatively outperformed their frontline peer lodging losses of -0.78% and -1.05% respectively.
Bullish Setups: TTAN, GNP, NJCC
Bearish Setups: MRCO, Z, APHS, TATA, HNDL
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 7847 |
| Resistance 1 | 7892 |
| Resistance 2 | 7921 |
| Support 1 | 7834 |
| Support 2 | 7774 |
| Nifty 20 SDMA | 7768 |
| Nifty 50 SDMA | 7506 |
| Nifty 200 SDMA | 7853 |
| Adv : Dec [NSE] | 408 : 1129 |
| Turnover Rs Crs. BSE+NSE cash | 28,479 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bullish |
| Stochastic | Bullish |
| DMI & ADX | Bullish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " At an inflection point " (29-Apr-16-EDEL)
Regards,
Tejas J. Shah +91 22 4063 5534
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