Support held in panic sell-off
Panic set at bourses in yesterday's trade with Nifty plunging 242 points from the intraday peak and ended with a loss of 1.76% at 8591. The index opened on a positive note tracking global cues, however geo-political tensions created panic among traders prompting sharp selling that breached below key support of 50 DEMA as well as an earlier bullish gap at 8622. Due to the extreme volatility and coupled with derivatives settlement, volumes have clocked at record high levels whereas the market breadth collapsed to 1:12 in favor of decliners. Volatility (India VIX) has spiked up to 18.45% and has reached 'Brexit' levels after trading near range lows of 13-14%. Momentum readings have reached an oversold threshold on the hourly charts whereas the same on daily chart are in bearish mode. Nifty is now critically poised at the trend line emerging from May-Jun lows followed by cluster of swing supports between 8515-8545 for the intermediate uptrend to remain intact. A breach lower will call for a deeper correction/retracement down to 8150. However, bullish sentiment will be invigorated above 8800 which remains a short-term resistance.
It was a secular down day at the bourses led by steep losses in Realty (-6.3%), Power (-4.1%) and Healthcare (-3.2%); whereas marginal outperformance was seen in IT (-0.95%) index. Broader market Mid-cap and Small-cap indices grossly underperformed their frontline peer with losses of -3.6% and -4% respectively.
Bullish Setups: VEDL, HCLT, IOCL, ARBP
Bearish Setups: LT, TTMT, JETIN
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8591 |
| Resistance 1 | 8642 |
| Resistance 2 | 8670 |
| Support 1 | 8545 |
| Support 2 | 8515 |
| Nifty 20 SDMA | 8792 |
| Nifty 50 SDMA | 8688 |
| Nifty 200 SDMA | 7991 |
| Adv : Dec [NSE] | 126 : 1532 |
| Turnover Rs Crs. BSE+NSE cash | 50,440 |
| Oscillators | Comments |
| RSI | Neutral |
| MACD | Bearish |
| Stochastic | Bearish (OS) |
| DMI & ADX | Bearish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Support held in panic sell-off " (30-Sep-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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