Nifty ended with a minor loss in yesterday's volatile session that saw the index print a new 52-week high above 8700. Owing to positive global cues, the index opened with a bullish gap to surpass the 8700 handle but faced resistance from the upward sloping resistance line and witnessed profit taking that spiraled down to a sharp intraday sell-off of 121 points from the peak and briefly breached the 8600 mark. However, the index quickly recouped the losses in the final couple of hours to close flat, thus forming a 'long-legged doji' candlestick pattern that indicates indecision among market participants. Trading volumes clocked at above average levels and the market breadth ended weak at 3:5 in favor of decliners. Volatility (India VIX) ticked back up above 15% but trades near range lows. Hourly momentum readings have rolled bearish, whereas daily oscillators throw mixed signals with MACD triggering sell crossover indicating imminent weakness. Nifty has reacted from resistance line at 8700 and hence expect a corrective / consolidation price action in the near-term. It is prudent to maintain trailing stop-loss at 8572 for long positions.
Among key sectoral movers gains were seen in IT (+1.76%), Metals (1.3%) and Autos (+0.47%); whereas losses were posted in shares from Cap Goods (2.34%), Banking (-1.18%) and FMCG (-0.52%) indexes. Broader market Mid-cap and Small-cap indices relatively outperformed their frontline peer with marginal gains of +0.38% and +0.10% respectively.
Bullish Setups: HCLT, PWGR, SUNP, BHFC, DITV
Bearish Setups: TECHM, ICICBC, DRRD, PNB, PIDI
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8635 |
| Resistance 1 | 8665 |
| Resistance 2 | 8715 |
| Support 1 | 8590 |
| Support 2 | 8572 |
| Nifty 20 SDMA | 8521 |
| Nifty 50 SDMA | 8298 |
| Nifty 200 SDMA | 7848 |
| Adv : Dec [NSE] | 609 : 1009 |
| Turnover Rs Crs. BSE+NSE cash | 28,356 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bearish |
| Stochastic | Bearish |
| DMI & ADX | Bullish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Indecision at resistance " (02-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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