Nifty has snapped the six-session losing streak with a gain of 0.92% to close back above the psychological 8000 handle. Owing to positive global cues, the index opened on a bullish note but soon attracted selling pressure and dragged down to an intraday low of 7938 by noon following which a sustained buying spree helped the index to an intraday high of 8019, thus forming an 'inside bar' pattern on daily chart. Trading volumes have clocked at below average levels and the market breadth ended at 3:2 in favor of advancers. Volatility (India VIX) subsided a bit to 18.5% and we expect it to swing between 17-21% in the short-term. Having retraced 100% of rally post Brexit low near 7900 coupled with 50% Fibo retracement of the up move from Feb Budget day lows to Sept peak, Nifty is now attempting to rebound. Moreover an 'inside day' signifies pause in the steep near-term decline aided by oversold readings on momentum oscillators. The index is likely to retest 8145 (200 DMA) to 8200 in the coming few sessions following which renewed selling pressure should emerge.
A mixed trend was seen among sectoral indices led by gains in Metals (+2.75%), Realty (+2.5%) and Autos (+1.9%); and losses were posted in shares from Cap Goods (-0.7%) and Power (-0.4%) indexes. Broader market Mid-cap and Small-cap indices strongly outperformed their frontline peer with gains of +1.4% and +1.15% respectively.
Bullish Setups: ENGR, OINL, IDEA, TCOM, TECHM
Bearish Setups: GAIL, JSTL, HNDL, BHEL
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 8002 |
| Resistance 1 | 8064 |
| Resistance 2 | 8100 |
| Support 1 | 7977 |
| Support 2 | 7938 |
| Nifty 20 SDMA | 8392 |
| Nifty 50 SDMA | 8590 |
| Nifty 200 SDMA | 8142 |
| Adv : Dec [NSE] | 990 : 629 |
| Turnover Rs Crs. BSE+NSE cash | 20,664 |
| Oscillators | Comments |
| RSI | Bearish (OS) |
| MACD | Bearish |
| Stochastic | Bearish (OS) |
| DMI & ADX | Bearish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Pause in selling " (23-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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