Thursday's recovery was short lived as failure to cross above 8600 activated renewed selling and resulted in a large down day of 2.7% to close below 8300 for Nifty. Once again the index opened with a large down gap (8460-8510) putting downside pressure early and continued to trend lower for the day thus extending the losses. Trading volumes clocked at above average levels and the market breadth ended strongly (1:8) in favor of decliners. Volatility (India VIX) has ticked up to 17.4% and we expect it to trade between 16-18% in the near term. Nifty has ended lower for a third consecutive week and continues to trade under its 50 DMA thus keeping the short-term bias lower. Daily momentum readings although in sell mode are showing signs of positive divergence and warn of potential recovery. Largely we expect Nifty to trade between 8120-8150 (200DMA & 61.8% Fibo support cluster) and 8500; hence look for Long side trading opportunities on any declines using stop-loss below 8100.
It was a secular down day at the bourses as sharp cuts were posted in Autos (-4.5%), Realty (-4%) and Telecom (-3.4%) indexes; whereas relative outperformance was seen in Healthcare (-1.2%) and Cap Goods (-1.75%) indices. Broader market Mid-cap and Small-cap underperformed their frontline peer with losses of -3.6% and -3.4% respectively.
Bullish Setups: PNB, SBIN, ENGR, SUNP, SAIL
Bearish Setups: MSIL, AMRJ, CENT, BAF
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8296 |
| Resistance 1 | 8360 |
| Resistance 2 | 8400 |
| Support 1 | 8230 |
| Support 2 | 8175 |
| Nifty 20 SDMA | 8574 |
| Nifty 50 SDMA | 8684 |
| Nifty 200 SDMA | 8122 |
| Adv : Dec [NSE] | 171 : 1470 |
| Turnover Rs Crs. BSE+NSE cash | 29,548 |
| Oscillators | Comments |
| RSI | Bearish |
| MACD | Bearish |
| Stochastic | Bearish |
| DMI & ADX | Bearish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Poised for a recovery " (15-Nov-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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