Index is hovering above the support of 8730 :: HDFC Securities

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Crucially Poised above the support; Is 8730 providing strength? Day’s action formed a bear candle with reasonable volumes which indicates bulls are losing momentum and bears are performing in the near term. Technically, index is hovering above the support of 8730; it was broken slightly in the first half but later during the day index traded above this level. We have not observed any sharp selloff and A/D ratio is almost 1:1 as no large selloff was witnessed in Mid & Small cap stocks and hence the indices. So the tussle between bulls and bears is continuing and the chance of moving up is still exists; on any move above 8840, index could rise once again towards life time high of 8997 and 9000/9050 which is medium term upper trendline. Use this rise for exiting the longs and don’t create aggressive longs as long as index stays below 9050. Alternatively, as index is crucially trading above the support of 8700, on any fall below 8700 index could extend the falling leg and it could slide down towards 8380 – 8250 which are gap support and swing support. As per Elliot wave, earlier said internal “wave iv” seems to be ended at 8725 and internal “wave v” up is open on a rise above 8840. if price slides in an impulse manner (below 8700) in a five wave decline then the unfolding “wave v” has already ended at 8997 and index is already in progress of major corrective leg.

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http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3011116