Nifty exhibited choppy moves in Friday's session after dropping down sub 7800 levels and managed to close with a marginal gain at 7850. The index opened marginally lower and rallied up to its 21 hourly EMA resistance followed by a sharp sell-off that tested the crucial 21 DEMA support of 7781 and recouped the losses in the final hour. On the daily charts, the index has formed a 'long-legged doji' candlestick pattern signifying indecision among market participants. Trading volumes clocked at slightly above average levels whereas the market breadth ended weak at 7:8 in favor of decliners. Volatility (India VIX) continued to remain flat at 16.6% despite passage of two key events and is most likely to climb higher in the coming weeks. Hourly momentum oscillators have rolled bearish and signal a corrective phase whereas the daily readings are showing mixed signal and unable to guide direction. Weekly charts exhibit a 'spinning top' like candlestick pattern after a strong rally in March-April thus signaling a pause or perhaps a correction in the coming weeks, however the low of 7772 needs to be breached with force for that to happen. Meanwhile, the upside is likely to be capped from stiff resistance in the 7980-8000 cluster and would open further upside only on breach of this mark. One can hazard trading shorts near 7900 with strict stop-loss of 8000 for a target of 7700-7650.
Trend among sectoral indices was mixed with gains seen in Realty (+1.18%), Power (+0.93%) and Healthcare (+0.76%); whereas losses were posted in shares from Telecom (-2.15%), IT (-0.45%) and Cap Goods (-0.24%) indexes. Broader market Mid-cap and Small-cap ended mixed with +0.22% and -0.05% respectively.
Bullish Setups: TTAN, GNP, NJCC
Bearish Setups: MRCO, Z, APHS, TATA, HNDL
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 7849 |
| Resistance 1 | 7878 |
| Resistance 2 | 7914 |
| Support 1 | 7821 |
| Support 2 | 7781 |
| Nifty 20 SDMA | 7781 |
| Nifty 50 SDMA | 7524 |
| Nifty 200 SDMA | 7849 |
| Adv : Dec [NSE] | 693 : 837 |
| Turnover Rs Crs. BSE+NSE cash | 21,315 |
| Oscillators | Comments |
| RSI | Neutral |
| MACD | Bearish |
| Stochastic | Bearish |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Long-legged Doji " (02-May-16-EDEL)
Regards,
Tejas J. Shah +91 22 4063 5534
Edelweiss Research is also available on Bloomberg EDEL <Go>, Thomson First Call, Reuters and Factset. Please write to us in case you need any assistance in this respect.
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