Nifty traded in consolidation mode for second day and ended Friday's session with a marginal loss of 6 points and under its 200 DMA. The index opened on a flat note and declined briefly to a lower low of 8048 before exhibiting a good intraday recovery of 80 points off the lows, but faced overhead resistance from a sharply declining 21 hourly EMA resulting in a round of selling in the second half. Volumes clocked at relatively lower levels and the market breadth rebounded to 8:7 in favor of advancers marking a recovery in the broader markets. Volatility (India VIX) has dropped down to 17.8% from 20.15% as downward acceleration slows down and we approach the crucial derivatives expiry week. Momentum oscillators are placed in an oversold zone on short-term charts and warn of possible counter trend rally; whereas the intermediate term readings are pointing lower. While the underlying trend for the index is clearly down and could head towards the 7900 (50% Fibo retracement) mark, expiry week can produce a breather with Nifty hovering between 8000-8200 band. Look for intraday recovery and minor higher highs to trade the pullback rally in the immediate near-term.
Among notable sector movers, gains were posted in Oil & Gas (+1.45%), Healthcare (+1.3%) and Realty (+1.25%); whereas losses were seen in shares from Metals (-1.2%), FMCG (-1%) and Banking (-0.6%) indexes. Broader market Mid-cap and Small-cap indices relatively outperformed their frontline peer with gains of +0.6% and +0.25% respectively.
Bullish Setups: PNB, ENGR, NTPC, DLFU, POWF
Bearish Setups: DRRD, TATA, HNDL
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8074 |
| Resistance 1 | 8137 |
| Resistance 2 | 8200 |
| Support 1 | 8048 |
| Support 2 | 8000 |
| Nifty 20 SDMA | 8465 |
| Nifty 50 SDMA | 8629 |
| Nifty 200 SDMA | 8137 |
| Adv : Dec [NSE] | 840 : 759 |
| Turnover Rs Crs. BSE+NSE cash | 20,050 |
| Oscillators | Comments |
| RSI | Bearish (OS) |
| MACD | Bearish |
| Stochastic | Bearish (OS) |
| DMI & ADX | Bearish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " 8000-8200 trading range " (21-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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