Edelweiss Technical Reflection (ETR)
§ The Nifty has taken a pause after rallying for five consecutive weeks. In the previous week, Nifty managed to cross the 6200 mark, but saw sustained profit booking from there. The momentum indicators have triggered a sell signal on the daily and hourly charts indicating some downside risk in the coming sessions. Overall market breadth for Friday was in favor of declines. Nifty stocks’ breadth stood at 1:1.5 Nifty has broken and closed below the trend channel from 5350 low calling for a correction towards the moving average supports. With momentum oscillators rolling bearish, the downside risk is greater in the short-term. On the other hand, any strong rally that can pull the Nifty back above the 6223 mark will negate bearish possibilities and get the Nifty back on track to test 6350 peak, followed by the 6500 channel target. Supports are at 6065-6080 and 5974.
§ Friday’s lackluster trading day was dominated by weakness in Metals, Auto and Consumer Durables down by ~1% each. Buying support was provided by Pharma, IT and Oil & Gas shares. Bullish Setups: CIPLA, RCAPT, IFCI, RIL, MLL. Bearish Setups: SESA, STLT, ICICIBC, JSTL.
§ Major global indices closed the week with gains mostly coming in the latter part. The European and US indices have managed to close near the highs indicating strong underline buying strength. SPX has comfortable moved above the 1150 mark and is on road for 1200-1225 in the current quarter. Momentum indicators have improved significantly on the weekly chart negating any substantial downside risks. USD-EUR has closed above the 61.8% retracement of the fall from 1.51 to 1.18. USD-INR has halted the descent at 44.05 and a short-term pullback towards 45 is in the offing.
§ Interesting chart setups: RIL, GAIL, IFCI, JSTL, ICICIBC
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