Spinning Top ; Indecision
Nifty has snapped the seven session losing streak with a marginal gain of 0.08% but has managed to close below the psychological 8000 handle. The session however witnessed volatile swings with the index dropping to a lower low of 7942 in the first half followed by a rally of approx. 80 points by noon, but resisted by the 21-hourly EMA once again dragged lower to end flat. As a result daily chart exhibits a 'spinning top' candlestick pattern signifying indecision and perhaps a temporary halt to the selling spree. Trading volumes clocked at average levels and the market breadth ended 7:8 in favor of decliners. Volatility (India VIX) remains at subdued levels of 15.1% and into the final week of the calendar year is likely to maintain status quo despite derivatives settlement. Momentum oscillator readings are pointing lower on the daily scale; however the fast stochastic in oversold territory suggests period of recovery / rebound in the immediate near-term. We expect the November low of 7916 to remain as a floor in the near-term and a pullback towards 8050-8085 is likely before weakness resumes.
A mixed trend was seen among sectoral indices led by losses in Realty (-1%), Healthcare (-0.65%) and FMCG (-0.5%); whereas marginal gains were posted in shares from Cap Goods (+0.85%), Autos (+0.3%) and Oil & Gas (+0.25%) indexes. Broader market Midcap and Small cap indices relatively underperformed their frontline peer with marginal losses of -0.4% and -0.05% respectively.
Bullish Setups: INFO, ICICIBC, MSIL, IGL, IRB, CESC
Bearish Setups: SUNP, DRRD, DABUR, BHEL, YES
| Nifty Index |
|
| Bloomberg Code | NIFTY Index |
| Spot Price | 7985 |
| Resistance 1 | 8022 |
| Resistance 2 | 8053 |
| Support 1 | 7942 |
| Support 2 | 7897 |
| Nifty 20 SDMA | 8136 |
| Nifty 50 SDMA | 8304 |
| Nifty 200 SDMA | 8246 |
| Adv : Dec [NSE] | 738 : 867 |
| Turnover Rs Crs. BSE+NSE cash | 17,668 |
| Oscillators | Comments |
| RSI | Bearish |
| MACD | Bearish |
| Stochastic | Bearish (OS) |
| DMI & ADX | Bearish & Trending |
* OB: Over Bought
OS: Over Sold
Edelweiss Technical Reflection (ETR): " Spinning Top ; Indecision " (26-Dec-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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