16 March: Edelweiss Technical Reflection (ETR)

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Edelweiss Technical Reflection (ETR)

Nifty dropped 1.53% in yesterday’s session, snapping the four session rally and putting the short-term bulls at risk. The index opened on a softer note and traded mildly lower until the crucial RBI policy meeting, and started to drag down rapidly on its announcement. It has managed to breach the 21 and 50 hour EMAs at 5420 and 5383 respectively that acted as supports on the way up. The drop in prices is not supported by substantial volumes; however the market breadth has been adverse at 1:2.8 indicative of the broader market price damage. The momentum oscillators have rolled bearish on daily chart, while the weekly oscillators maintain their buy stance leading to choppy conditions for traders. The hourly MACD is trading near the zero line suggesting the corrective cycle is near completion and the up move should resume soon. We continue to maintain our ST bullish with the reversal pegged below 5333 for targets of 5530 and 5630. On sustenance of trade below, Nifty is likely to drop lower towards the intermediate trend pivot at 5200.
Barring the minor uptick in the IT index (+0.09%), all other sectoral indices ended the day in the red. The biggest damage was seen for the rate sensitive Realty (-2.66%) and Banking (-2.60%) indexes, followed by Cap Goods (-2.04%) and Oil & Gas (-1.85%) sectors. Even the broader markets were not sparred of the sell-off as the Mid-cap and Small-cap indexes ended lower by -1.39% and 0.97% respectively.


Bullish Setups: LT, CNXBANK, HNDL, COAL, HUVR
Bearish Setups: MSIL, DLF