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
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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