23 November 2010

Edelweiss Technical Reflection (ETR): Nov 23, 2010

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Edelweiss Technical Reflection (ETR)
§  The index bounded off smartly in yesterdays session after previous weeks heavy loss. The market has respected the six months rising trend line support at 5840, a sign of technical pullback. Daily oscillators are pointing lower, but are in oversold territory; hence a sustained pullback is likely. Market breadth improved in favor of advances. Nifty stocks’ breadth was robust at 7:1. The index has given a bullish break of a short-term descending channel that will help a further up move in the immediate near-term. Yesterdays rally was on relatively low volumes and is likely to extend towards 6045 and 6100 which are 38.2% and 50% retracement levels of the fall from 6338 to 5864. A couple of daily close above 6100 would warrant the resumption of the larger uptrend. Until then rallies towards resistances should be used as selling opportunities.
§  All sectoral indices ended in the green yesterday, with Banking, Consumer Durables and IT shares notching up gains of >2%. CapGoods, Pharma and FMCG stocks underperformed the index yesterday. Bullish Setups: ITC, HNDL, TATA, CIPLA, INFO. Bearish Setups: JSP, BHEL, IVRC
§  European indices ended with a loss of 1%, whereas US equities closed with marginal loss. Shanghai Composite has re-tested the breakout level of 2900 in a deeper weekly loss. The medium term trend remains up as long as 2705 is not breached. DXY has found support at 21 DEMA from where the short-term uptrend is resuming after a brief consolidation. The immediate upside target is pegged at 80.15.
§  Interesting chart setupsTATA, LT, ITC, CIPLA, JSP, IVRC

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