Edelweiss Technical Reflection (ETR) - March 10, 2011

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Edelweiss Technical Reflection (ETR)

§  After opening in the green and making a higher high, the index for the remaining part of the session traded choppily, finally ending with a marginal gain. The formation of a higher top and higher bottom has been maintained on the daily chart. Price and momentum setup on the intraday chart suggests that the index has got into a consolidation phase which is likely to continue for few more sessions. Tepid volumes also characterize the same. Yesterday’s market breadth remained in favour of advancing stocks; whereas Nifty 50 stocks A/D ratio ended neutral at 1:1. We reiterate the broad range trade between 5400-5650 with an upward bias in the short-term. It is advisable to wait out the near-term consolidation before a strong breakout is achieved.

§  Barring the defensive Healthcare and Technology stocks, all other sectorial indices ended up with gains. High beta Realty shares were in the limelight by gaining ~1.75%. BSE Realty index has made a higher high for the second consecutive week signaling a short-term uptrend for a target of 2200-2250. Bullish Setups: RIL, Infosys (INFY), SAIL, IB Real Estate (IBREL), IFCI, Bearish Setups: BPCL, HUL (HUVR), GAIL

§  SPX has been confined to a consolidation triangle as the momentum setup deteriorates. This suggests that the index will attempt a final move towards higher territory before entering a sustained corrective phase. Crude Oil is consolidating around $105, but will eventually move higher towards $111-$120. Likewise Gold is taking time off lurking around $1430 before resuming its upward march. As per expectations, Copper has started accelerating lower breaking the 50-DMA as we look for a test of the 200-DMA.