Edelweiss Technical Reflection (ETR) March 27

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Edelweiss Technical Reflection (ETR)

Nifty suffered yet another drastic fall on Monday following the sharp decline in the previous week. The index lost 1.78% as it closed below 5200 and is perilously close to testing the 200 DMA at 5154. Ignoring the positive cues from the Asian peers, Indian markets opened on a weak note and continued to attract selling activity right until the close on the back of negative developments domestically. The fall was on the back of average volumes and a poor A/D ratio of 1:3.3, as well as a substantial rise in volatility. The index has dropped below the consolidation pattern and is most likely to slide down to the 200 DMA support. The oscillator signals have turned bearish with the near-term indicator turning Oversold, which could result in a pullback from the 200 DMA support. Expect Nifty to exhibit a rebound rally from combination of 200 DMA and the trend line support at 5171/5154 in the near-term, risking a slide down to 5080 (50% retracement of the up move from  4530 to 5630) in the case of a close below the 200 DMA.

All the 13 sectoral indices ended the day in the red. The decline was led by steep losses in Realty (-3.58%), Power (-2.56%) and Banking (-2.44%) indexes. Defensives like FMCG (-0.40%) and Healthcare (-1.17%) managed to outperform the benchmark index. Mid-cap and Small-cap indices traded in line with the frontline index with losses of 1.60% and 1.40% respectively.

Bullish Setups: LPC, HUVR, ITC, BHARTI, JPA

Bearish Setups: MSIL, HNDL, JUBI, TTAN