03 July 2012

Edelweiss Technical Reflection (ETR) 3 July


Edelweiss Technical Reflection (ETR)
It is not surprising to see markets trade sideways after a large move, and that is what we got in yesterday’s session with Nifty ending the day dead flat. Even the day’s trading range remained narrow suggesting the bulls taking a breather at the crucial resistance of 5300. The activity was more pronounced in the broader markets that resulted in decent volumes and a favorable market breadth (A/D ratio of 2:1). Momentum in the immediate near-term is a bit overbought resulting in some minor profit taking / sideways price action; however the short / medium term readings are bullish to help the index climb above the 5300 barrier. Traders are recommended to use the 10-day EMA (5172) as a trading stop-loss and maintain longs for a target of 5440.

Among the notable sectoral gainers in yesterday session were Realty (+2.32%), Banking (+0.66%) and Power (+0.65%) indices. Underperformers list included stocks from the FMCG (-2.08%), Auto (-0.56%) and IT (-0.27%) sectors. The broader market Mid-cap and Small-cap indices managed to outperform the frontline index with gains of 0.90% and 1.09% respectively.

Bullish Setups: TATA, HMCL, BHEL, ICICIBC, PWGR, DLFU, ADE
Bearish Setups: TTMT/A, BHARTI, COAL

Regards,
Edelweiss Research 



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