06 December 2010

Edelweiss Technical Reflection (ETR) Dec 6, 2010

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Edelweiss Technical Reflection (ETR)
§  The index traded in a tight range for the second day, as the uncertainty about the market direction prevailed among traders. Nifty has bridged the gap left between 5970-5960, and closed the day below the crucial 6000 mark. Although on a weekly basis it has closed in the green and made a higher high; higher low. Daily momentum oscillators are mixed, whereas weekly oscillators are sideways. The short-term trend will turn higher on a daily close above 6000. Market breadth was strongly in favor of declines, which remains the concern for the market. Nifty 50 stocks A/D ratio was neutral at 1:1. For the day, we expect the index to trade higher towards the 6035-6065 resistance band, with support at 5960. On a break below support, the index is likely to test the 5860 (swings support area). The short-term range for the index is between 6100 and 5820.

§  Realty, Metals and Banking stocks were under selling pressure, whereas IT, Auto, and Cap Goods shares bucked the trend. Bullish Setups: BHARTI, CIPLA, GAIL, SAIL, INFO, SUEL Bearish Setups: RELI, ACC, BHEL

§  Global indices ended the previous week on a positive note. Shanghai Composite Index is trading at crucial trend line support and is likely to begin the next leg up for a target of 3100-3200. We maintain our bullish bias on Crude Oil for test $90 and $100. Gold has moved baclk above the $1400, closing at an all time high. The uptrend is likely to target $1460.

§  Interesting chart setupsBHARTI, GAIL, CIPLA, ACC, RELI, OBC

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