Markets ended lower for the third day in a row albeit with marginal losses as the bears pounced on any opportunity to press sales. Nifty opened in the green tracking the Asian peers, however unable to cross above its 21 and 50 hourly EMAs that have given a sell-crossover, the bearish trend began to reinforce. The index took support near its previous day’s low of 5217 as well as the 21-day EMA (5214) that needs to be violated for any downside acceleration. Volumes were relatively lower and the breadth was mildly in favour of declines. There was however a minor decline in India VIX as the weekend led to unwinding of positions. Nifty has snapped the five-week winning streak with a weekly negative close indicating an end to the upward cycle from the low of 4770. A retracement of the up move now follows that has a target of 5125 i.e. the minimum 38.2% retracement mark. Momentum oscillator MACD has rolled over underlining the short-term bearish outlook.The weekly momentum setup however is contradictory where the MACD has crossed above the zero line in positive territory indicating an intermediate bullish setup. Immediate upside is capped at 5300 and should be used as a stop‐loss for trading shorts.
Trend among the sectoral indices was mixed with gains coming from Realty (+0.83%), Healthcare (+0.32%) and Power (+0.17%) indices; whereas among the notable lo sers were shares from Auto (-0.78%), Oil & Gas (-0.62%) and IT (-0.27%). The broader markets on the other hand managed to outperform their peers with gains of 0.54% for the Mid-cap index and 0.73% for the Small-cap index.
Bullish Setups: CNXBANK, BHEL, ITC, HMCL
Bearish Setups: TTMT/A, JETIN, WPRO, JSP
Rega rds,
Edelweiss Research
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