Sunday, 31 July 2016

{LONGTERMINVESTORS} Edelweiss Technical Reflection (ETR): " Consolidation near highs " (01-Aug-16-EDEL)

 
 

Consolidation near highs

Friday's session saw the markets consolidate further as the Nifty lost 0.32% to close at 8638 in what was a narrow range day. The index opened on a flat note and witnessed gradual deterioration in prices, albeit holding above the 21 hourly EMA. Trading volumes clocked at above average levels and the market breadth ended weak at 7:9 in favor of decliners. Volatility (India VIX) continues to tick down and is now below 15% as market participants expect a benign short-term risk environment. Momentum studies are displaying initial signs of negative divergence on daily charts while trading within an overall bullish setup, hence caution is advised at current lofty levels. With Nifty trading near the upper band of a rising trend channel, reactions from the resistance line at 8700 are likely unless a strong breakout is seen in which case the index can surge up to 8845. Hence it is prudent to fade further rallies to 8700 and maintain a trailing stop-loss at 8572 for long positions. A mixed trend was seen among sectoral indices with gains posted in Autos (+0.79%), Healthcare (+0.72%) and Oil & Gas (+0.51%); whereas losses were seen in shares from Telecom (-1.64%), Cap Goods (-0.73%) and Metals (-0.63%) indexes. Broader market Mid-cap and Small-cap indices relatively outperformed their frontline peer with gains of +0.7% and +0.23% respectively.

Bullish Setups: HCLT, PWGR, SUNP, BHFC, CRG, RELI, DITV

Bearish Setups: TECHM, ICICBC, DRRD, PNB, PIDI

 

 Nifty Index

 

Bloomberg Code

NIFTY Index

Spot Price

8638

Resistance 1

8675

Resistance 2

8715

Support 1

8604

Support 2

8572

Nifty 20 SDMA

8505

Nifty 50 SDMA

8280

Nifty 200 SDMA

7845

Adv : Dec [NSE]

716 : 911

Turnover Rs Crs.

BSE+NSE cash

26,902

 

Oscillators

Comments

RSI

Bullish

MACD

Bullish

Stochastic

Bullish (OB)

DMI & ADX

Bullish & Trending

* OB: Over Bought

   OS: Over Sold

 

Edelweiss Technical Reflection (ETR): " Consolidation near highs " (01-Aug-16-EDEL)

 

Regards,

Tejas J. Shah +91 22 4063 5534

tejasj.shah@edelweissfin.com

 

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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