Edelweiss Technical Reflection (ETR): 5 Jan

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Edelweiss Technical Reflection (ETR)

Profit booking was the order of the day with the index closing lower by 0.33%. Once the Nifty opened for trade sellers got active at higher levels and pushed the index lower towards the 21 DEMA at 4745, followed by a sudden up move that was again met with strong selling taking it down to a new intraday low of 4728. The index finally settled marginally above the low forming a small bodied bearish candlestick. Momentum oscillators are positively positioned on the daily and hourly charts indicative of a continuation of the up move from 4588. Trading volumes have started to gain traction with a marginally favorable market breadth. We maintain our upward bias on the index in the short-term and expect it to test its next resistance point of 50 daily EMA at 4859. Downside is likely to be protected by the 50 hourly EMA at 4705.

Trend among the sectoral indices was mixed with major gains coming in from the PSU (+1.73%), Cap Goods (+1.10%) and Banking (0.69%) shares. Among the prominent losers of the day were Auto (-1.21%), FMCG (-0.52%) and IT (-0.49%) indices. Mid-cap and Small-cap indices ended the with marginal gains of 0.17% and 0.20% respectively.

Bullish Setups: DRRD, PIHC, SAIL, AXSB, LT

Bearish Setups: LPC, RBXY, AL, HUVR