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Edelweiss Technical Reflection (ETR)
§ Nifty opened above the 6000 mark and traded strongly throughout the day to close at the highest level in six weeks. It has given a break past the 50 DMA and even managed a close higher indicating that the bulls have regained control of the market. Despite low participation, yesterday’s rally was a broad based one validating a genuine breakout. Daily momentum oscillators have emphatically triggered a buy signal and the hourly oscillators too have turned bullish beginning a fresh up cycle. Market breadth was strongly in favour of advances. Nifty 50 stocks A/D ratio was encouraging for the bulls at nearly 3:1. With yesterday’s smart up move, Nifty has managed to make a higher top higher bottom formation on the daily chart, and a break above 6070 would confirm the same. In the immediate short-term, Nifty may face selling pressure at 6090-6100 owing to the volatile monthly derivative settlement, but the uptrend is gaining strength in momentum as well as price action.
§ Bullish trend was witnessed in all the sectoral indices, particularly FMCG, Metals and Banking shares that attracted gains of ~1.5%. Realty, Oil & Gas and Healthcare shares were among the day’s underperformers. We continue to maintain a positive bias on Bank Nifty as long as 11,400 is held. Upsides can be seen till 11,900-12,000. L&T is on the verge of a bullish triangle breakout which will be confirmed above 2020.
Bullish Setups: PLNG, DIVI, ABAN, JSP, BHARTI, HDFC, RECL, PNB
Bearish Setups: KMBH, DRRD, RPWR, TTSL
§ Gold has triggered a breakout above the short-term consolidation phase regaining the $1400 mark. Momentum and price setup looks strong to break past the all-time high of $1431. Euro has recouped yesterday’s late sell-off and is set to close above 1.32 and commence a short-term rally towards 1.36. Equities across the world are trading with a positive bias before closing the year.
§ Interesting chart setups: PLNG, SHRS, ABAN, JSP
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