Markets continue to undergo severe selling pressure as yesterday's session marked the biggest down day in recent sessions as Nifty lost 2.26% to close a shade above 8100 level and below the crucial 200 DMA. After a lower open the index began to sell off hard, but managed to find some footing at the test of 200 DMA and was followed by some sideways price action. However the selling re-emerged in the final hour and breached underneath the 200 DMA support to close lower. Volumes have clocked at substantially above average levels suggesting panic selling. Market breadth continues to remain poor at 1:8 in favor of decliners and volatility (India VIX) has spiked up to 20.15% opening further headroom to test 22% levels in the near-term. Momentum studies have entered an oversold state and the Put-Call ratio at 0.70 is also indicating an oversold condition that can trigger a pullback rally. For the near-term we expect Nifty to oscillate between 8050-8400 and broader markets will continue to see pronounced bearish activity.
Barring a marginal gain of 0.30% in IT index, all other sectoral indices ended the session with steep losses led by Realty (-5.1%), Autos (-5%) and Metals (-4.75%) indexes. Broader market Mid-cap and Small-cap indices continue to relatively underperform their frontline peer with losses of -3.9% and -4.7% respectively.
Bullish Setups: PNB, SBIN, DITV, WPRO
Bearish Setups: MSIL, AMRJ, BHEL, CAIR, HNDL
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8108 |
| Resistance 1 | 8180 |
| Resistance 2 | 8235 |
| Support 1 | 8050 |
| Support 2 | 8000 |
| Nifty 20 SDMA | 8554 |
| Nifty 50 SDMA | 8671 |
| Nifty 200 SDMA | 8126 |
| Adv : Dec [NSE] | 169 : 1518 |
| Turnover Rs Crs. BSE+NSE cash | 38,985 |
| Oscillators | Comments |
| RSI | Bearish (OS) |
| MACD | Bearish |
| Stochastic | Bearish |
| DMI & ADX | Bearish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Stress test at 200 DMA " (16-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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