Feb 28: Edelweiss Technical Reflection (ETR)

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Edelweiss Technical Reflection (ETR)

The short-term weakness persisted for the third day in a row as the Nifty ended ~1% lower, snapping the seven week advance. On the weekly charts a ‘dark cloud cover’ candlestick pattern has formed warning of further near-term downside risks. The ‘rising gap’ between 5428-5460 has been closed in Friday’s session which will add confidence to the bears. However, the larger setup continues to remain bullish as long as the index maintains its head above 5175 (200 DMA). There is also an intermediate term bullish development in the form of a ‘Golden Cross’ i.e., the 50 day EMA crosses above 200 day EMA at 5177. Absolute near-term momentum oscillator (Stochastics) had rolled bearish and is in oversold territory, whereas the RSI is trading lower albeit in bullish territory. Turnover for the day was relatively higher and the market breadth remained in favour of declines with an A/D ratio of 1:2. We maintain our short-term corrective bias for targets of 5360 (21 DEMA) and possibly down to 5250 (14-month falling trend line re-test). Upside is likely capped at 5540.

Trend among the sectoral indices was mixed. The prominent losing sectors of the day were Cap Goods (-2.96%), Realty (-2.28%) and Banking (-1.95%). On the gainers list were Metals (+1.08%), IT (+0.55%) and FMCG (+0.28%). The broader market Mid-cap and Small-cap indexes marginally outperformed their frontline peer with loss of -0.64% and -0.71% respectively.

Bullish Setups: ONGC, BHEL, INFY, PWGR, HPCL

Bearish Setups: TATA, SESA, AXSB, KMB