Edelweiss Technical Reflection (ETR) - March 17, 2011

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Edelweiss Technical Reflection (ETR)

§  Proceedings for yesterday’s trade began on a positive note and continued for most part. Nifty scaled above the 5500 mark, but closed slightly above on last hour profit booking. Nifty is now trading back above the 21-DEMA which will add confidence to the bulls in the short-term. Momentum oscillators on daily and hourly chart have given a buy crossover underlining the upward bias. Nifty has closed above the 21 and 50 hourly EMAs which will act as intraday supports. Market bounced back in favour of advancing stocks, but the recent trends in A/D ratio do not indicate the market direction. Nifty 50 stocks A/D ratio was robust at 6:1. Nifty is expected to remain choppy within the trading range of 5400-5600. A slew of moving averages around 5600 will restrict gains. Whereas multiple swing supports around 5400 will keep the downside protected.

§  All sectoral indices witnessed a positive trend in yesterday’s session. The interest rate sensitive Realty, Banking and Consumer Durables stocks gained the most, whereas FMCG, Oil & Gas and Metals stocks underperformed the market. We reiterate the bullish bias on BSE Oil & Gas index that is making higher tops and bottoms on weekly chart. We look for a test of 10225 over the coming week.

§  Bullish Setups: CIPLA, RCOM, Voltas (VOLT), HCL Tech (HCLT), Yes Bank (YES) Bearish Setups: HUL (HUVR), Cummins (KKC), Jain Irri (JI), Renuka Sugars (SHRS)

§  Global stocks continue to remain in a state of flux owing to the global fears plaguing the markets. Developed market indices have entered a phase of sustained correction where a test of the 200-DEMAs is most likely. Crude Oil has retreated below $100, but finds good support at $96.75 from where a fresh advance is likely