After previous day’s indecisive session, the index finally slipped down to 5050 levels in yesterday session on the back of profit taking at higher levels. Nifty opened on a flat note and traded in a tight range in the morning session and started to crack down once it closed below its 21-hourly EMA, and went down to settle near its 50-hourly EMA at 5052. The bearish momentum oscillators on the hourly charts had warned of correction, however the index now seems to be close to its strong support levels of 5010 / 5000 from where it has room to move higher. Volumes were dismal in yesterday’s session and the breadth was strongly in favour of declines. Volatility climbed up to 25.71, tracked by the India VIX. The daily MACD has managed to move into positive territory which is a positive sign. Since we are in the final session of the week, Nifty needs to manage a close above 5068 for a continuation of the one week uptrend, whereas a weekly negative close could signal further profit taking into the next week. Using 5000 as a bullish pivot, one can look to create trading longs for a test of the 50% retracement levels of 5200.
Barring the IT index (+0.33%), all other sectoral indices ended the day in the red. Among the top losers of the day were stocks from Realty (-2.91%), Banking (-2.82%) and Cap Goods (-2.79%) indexes. Broader market indices too ended lower as the Mid-cap index shed 1.27% and the Small-cap index lost 0.67%.
Bullish Setups: CNXBANK, REC, HUVR, DRRD, SIEM
Bearish Setups: INFO, HDFC, MM
Regards,
Edelweiss Research
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