Markets have extended gains for a sixth straight session with Nifty lodging a gain of 0.5% to close at a new calendar high of 8370. The index opened on a bullish note with a gap up and nearly tested the 8400 handle before seeing profit taking in the second half. Trading volumes clocked at average levels and the market breadth ended robust at 2:1 in favor of advancers. Volatility (India VIX) has further subsided down to 15.6% but is unlikely to drop below the 15% mark. A 'doji' like candlestick pattern after an incessant rally warns of corrective/consolidation risk and hence it is prudent to be cautious on long positions. Momentum oscillators too have been trading near overbought levels and showing negative divergence on the hourly scale whereas the daily readings are in a bullish state. With a mid-week holiday on cards, Nifty is likely to take a breather while maintaining its head above 8300. It is prudent to trim longs on any upticks as the upside is likely to be limited to 8490 and risk-rewards don't favor the bulls. Key trend pivot is pegged at the 21 DEMA of 8189.
Trend among sectoral indices was largely positive led by gains in Realty (+2.2%), Metals (+1.67%) and (+1.56%); whereas the only losing sector was FMCG (-1.32%) index. Boarder market Mid-cap and Small-cap indices relatively outperform their frontline peer indices with gains of +0.58% and +1% respectively.
Bullish Setups: ONGC, JETIN, BEML, CIPLA, BOI
Bearish Setups: DABUR, MRCO, YES
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8370 |
| Resistance 1 | 8400 |
| Resistance 2 | 8450 |
| Support 1 | 8320 |
| Support 2 | 8270 |
| Nifty 20 SDMA | 8204 |
| Nifty 50 SDMA | 8034 |
| Nifty 200 SDMA | 7791 |
| Adv : Dec [NSE] | 1071 : 521 |
| Turnover Rs Crs. BSE+NSE cash | 20,762 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bullish |
| Stochastic | Bullish (OB) |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Indecision near 8400 " (05-Jul-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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