Markets have snapped the six session winning streak after a day of profit booking that pulled Nifty down by 0.42% to close at 8335. The index opened weak following negative global cues and gradually slid down throughout the day and has breached below the 21 hourly EMA marginally. Although the daily chart displays a bearish engulfing candlestick pattern, the efficacy is low as Monday's range was a smaller one. Trading volumes have clocked at average levels and the market breadth has ended 7:9 in favor of decliners. Volatility (India VIX) has dropped down to 15.36% and is back within complacency zone where participants expect a low risk environment in the near term. Momentum oscillators continue to be mixed with hourly readings rolling bearish whereas daily readings are bullish albeit near overbought territory. Expect Nifty to take a breather/consolidate 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 8202.
A mixed trend was seen among sectoral indices with gains posted in shares from Metals (+0.4%), Cap Goods (+0.35%) and Healthcare (0.21%); whereas losses were seen in shares from Autos (-1.09%), Telecom (-0.86%) and Power (-0.71%) indexes. Boarder market Mid-cap and Small-cap indices relatively outperformed their frontline peer with marginal losses of -0.08% and -0.11% respectively.
Bullish Setups: ONGC, JETIN, BEML, CIPLA, BOI
Bearish Setups: DABUR, MRCO, YES
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8335 |
| Resistance 1 | 8381 |
| Resistance 2 | 8450 |
| Support 1 | 8277 |
| Support 2 | 8202 |
| Nifty 20 SDMA | 8207 |
| Nifty 50 SDMA | 8041 |
| Nifty 200 SDMA | 7793 |
| Adv : Dec [NSE] | 707 : 890 |
| Turnover Rs Crs. BSE+NSE cash | 20,367 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bullish |
| Stochastic | Bullish (OB) |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Winning streak snapped " (07-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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