Finally the day has come when Nifty breaks out of its month long slumber to this year's high of 8750 with a strong rally to close with a gain of 1.6%. The index opened with a bullish gap following Monday's late surge and managed to breach the consolidation triangle pattern at 8680 and was followed by a sharp rally owing to short-covering and fresh buying interest. Trading volumes clocked at above average levels and the market breadth was robust at 2:1 meanwhile the Nifty breadth was a whopping 12:1 as large caps ruled the roost. Volatility (India VIX) deflated further down to 13% and now trades at a historical range low which is unlikely to sustain. With momentum cooling off to neutral levels and marginally swinging into sell territory, yesterday's price action has pulled the momentum back in bullish mode resuming a new short-term up cycle. Nifty is now poised to swiftly rally to 8900-9000 levels in the short-term with the band of 8660-8680 now acting as a crucial support cluster.
Barring a loss of -1.2% in Telecom index, all other sectoral indices ended the day in green and were led by Autos (+1.81%), IT (+1.77%) and Banking (+1.5%). Boarder market Mid-cap and Small-cap indices relatively underperformed their frontline peer with gains of +0.8% and +1% respectively.
Bullish Setups: ICICIBC, INFO, SAIL, EXID, DRRD, OBC
Bearish Setups: BHARTI, HEXW, NCC
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8744 |
| Resistance 1 | 8780 |
| Resistance 2 | 8810 |
| Support 1 | 8702 |
| Support 2 | 8680 |
| Nifty 20 SDMA | 8633 |
| Nifty 50 SDMA | 8503 |
| Nifty 200 SDMA | 7896 |
| Adv : Dec [NSE] | 1009 : 578 |
| Turnover Rs Crs. BSE+NSE cash | 23,165 |
| Oscillators | Comments |
| RSI | Bullish |
| MACD | Bearish |
| Stochastic | Bullish |
| DMI & ADX | Bullish & Non Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Bulls charge to yearly high " (31-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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