Nifty has catapulted to new calendar year highs above 8400 following a sideways correction in the previous week mainly led by a rally in global equities. The index opened with a large bullish gap of 54 points and continued to build on the gains thereafter towards the 8500 handle with a small breather in between. Trading volumes clocked at average levels whereas the market breadth ended at a robust 2:1 in favor of advancers. Volatility (India VIX) is now trading at a one month low of 14.85% from where it rebounded sharply in the previous month. Momentum readings have turned bullish barring stochastic oscillator that trades with a sell crossover; and the hourly oscillators too have rolled bullish after completing the corrective cycle. We continue to maintain a cautious stance in the near term as the Nifty approaches resistance from an expanding triangle at 8535 and can see meaningful profit taking. A close above 8535 will negate the stance as the rally would likely stretch up to the one-year peak of 8650. On the downside, the key support is pegged at the 21 day EMA of 8246.
A secular uptrend was seen among sectoral indices led by gains in Metals (+2.46%), Autos (+2.19%) and Banking (+2.07%); whereas relative underperformance was seen in shares from FMCG (+1%) and IT (+1.12%) indexes. Boarder market Mid-cap and Small-cap underperformed their frontline peer with gains of +1.49% and +0.79% respectively.
Bullish Setups: ONGC, IHFL, KMB, BEML, APNT
Bearish Setups: TATA, GAIL, IBREL, BHARTI
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8467 |
| Resistance 1 | 8500 |
| Resistance 2 | 8535 |
| Support 1 | 8443 |
| Support 2 | 8407 |
| Nifty 20 SDMA | 8231 |
| Nifty 50 SDMA | 8071 |
| Nifty 200 SDMA | 7802 |
| Adv : Dec [NSE] | 1094 : 540 |
| Turnover Rs Crs. BSE+NSE cash | 20,996 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bullish |
| Stochastic | Bearish |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " 8535 beckons " (12-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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