Sideways consolidation complete
Nifty continues to consolidate in a sideways manner with a minor downtick of 0.18% on Friday to close at 8323. After a flat open, the index slid lower and briefly breached the 8300 handle but quickly recouped the losses and traded in a narrow range thereafter. Trading volumes clocked at below average levels whereas the market breadth ended weak at 3:5 in favor of decliners. Volatility (India VIX) further dropped down to 15% and is approaching previous low of 14.7% from where a rebound is very likely. The weekly chart display a 'spinning top' candlestick pattern that signals indecision and possibly a reversal once the low of 8287 is breached lower. On the other hand a move above 8398 will lead to further extension of rally towards the 8500 mark. Momentum indicators continue to show mixed readings with stochastic rolling over and RSI trading in bullish territory. We maintain a cautious stance as the rally off 7927 low is unlikely to sustain beyond 8500 and hence t is prudent to trim longs on any upticks. Key trend pivot is pegged at the 21 DEMA of 8224.
Trend among sectoral indices was mixed led by gains in Autos (+0.63%), Healthcare (+0.43%) and IT (0.06%); whereas losses were seen in shares from Telecom (-2.2%), Cap Goods (-1%) and Oil & Gas (-0.98%) indexes. Boarder market Mid-cap and Small-cap indices ended mixed with 0.11% and -0.17% respectively.
Bullish Setups: ONGC, CDH, JETIN, BEML, CIPLA
Bearish Setups: COAL, GAIL, YES, GDSP
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8323 |
| Resistance 1 | 8353 |
| Resistance 2 | 8398 |
| Support 1 | 8285 |
| Support 2 | 8225 |
| Nifty 20 SDMA | 8216 |
| Nifty 50 SDMA | 8058 |
| Nifty 200 SDMA | 7799 |
| Adv : Dec [NSE] | 617 : 988 |
| Turnover Rs Crs. BSE+NSE cash | 19,733 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bullish |
| Stochastic | Bearish |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Sideways consolidation complete " (11-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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