Tussle between bulls and bears to gain control of the market continues as the benchmark Nifty manages to trade between 8600-8700 for yet another session. Nevertheless, the index has closed on a weak note, losing 0.44% but maintains its head above the 21-day EMA. Trading volumes clocked at below average levels in the ongoing expiry week and the market breadth slipped to 7:9 in favor of decliners. Volatility (India VIX) too has slid down to 14.24% but is expected to tick up as its global peers show a near-term upward trajectory. Momentum oscillator readings have more-or-less remain unchanged and unable to guide direction due to the sideways price action. We read this as a period of consolidation within a strong uptrend and should eventually resolve higher. On closer observation, Nifty seems to be forming a triangle pattern and hence is likely to trade sideways for few more sessions before witnessing a breakout. It is prudent to maintain a bullish underlying bias with strong support pegged at 8520 and a breakout trigger above 8700 for an extended target of 8865.
Barring a marginal gain of 0.62% in FMCG index, all other sectoral indices ended in the red and were led by losses in IT (-1.07%), Autos (-0.89%) and Healthcare (-0.73%) indexes. Mid-cap and Small-cap indices relatively underperformed their frontline peer with losses of -0.42% and -0.14% respectively.
Bullish Setups: SAIL, ICICIBC, VEDL, BOI, NMDC, ICIL
Bearish Setups: BEML, ARBP, TECHM, BHAFIN
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8629 |
| Resistance 1 | 8675 |
| Resistance 2 | 8696 |
| Support 1 | 8600 |
| Support 2 | 8540 |
| Nifty 20 SDMA | 8632 |
| Nifty 50 SDMA | 8445 |
| Nifty 200 SDMA | 7878 |
| Adv : Dec [NSE] | 699 : 902 |
| Turnover Rs Crs. BSE+NSE cash | 21,221 |
| Oscillators | Comments |
| RSI | Neutral |
| MACD | Bearish |
| Stochastic | Bearish |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Gradual drag to 8600 " (23-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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