Edelweiss Technical Reflection (ETR)

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Edelweiss Technical Reflection (ETR)

§   Nifty clawed back the gains lost on the Budget day with a sharp rally in the previous session. Nifty has surpassed the Budget day high of 5477 and even scaled above 5500 and closed higher. There has been a shift in the trend after previous session as various technical parameters have turned bullish. Nifty is trading above the hourly moving averages that have given a bullish crossover, hourly MACD has moved above the zero line and all daily oscillators have turned bullish. Market breadth ended strongly in favour of advances and all the 50 Nifty stocks were in the green. Nifty has managed a close above the 20-DMA as well as closed above the declining trend channel from the February peak indicating g a bullish breakout. The short-term uptrend will extend towards 5635-5647 i.e. 200-DMA and is likely to be intact as long as 5400 support remains inviolate on a closing basis.

§   The rally in the previous was broad-based as result all sectoral indices closed in the green.  Auto shares catapulted with gains in excess of 5% leading the upmove. Closely following were Banking, Realty and Cap Goods shares. We continue to maintain the cautious stance on BSE IT index which is expected to underperform on a weak technical structure. 

Bullish Setups: IDFC, Suzlon (SUEL), SBI, BHARTI, Bajaj Auto (BJAUT) 

Bearish Setups: Tata Power (TPWR), Mundra Port (MSEZ), Educomp (EDSL), TV-18 (TLEI)

§   US and European equities have entered a sustained corrective phase from recent peaks and likely to test the 50-DMAs. Meanwhile Crude Oil continues to scorch above $100 scaring equities worldwide. Gold has broken above the previous all-time high of $1430 well in an uptrend towards the $1550 mark. DXY continues to sink under selling pressure on target to test the strong 75.85 support.