Edelweiss Technical Reflection (ETR):: - September 24, 2012-EDEL

Edelweiss Technical Reflection (ETR)Markets tend move strongly on Fridays when they are in a trend, and that is exactly what we got in the previous session, as Nifty powered its way through to a new 52-week high as well as a new high for the calendar year, breaking above the 5700 barrier intraday. Underpinned by positive sentiment from the govt’s reform stance, the bulls backed themselves to break through important resistances with ease. Volumes were extremely high and the breadth was robust as well with an A/D ratio of 2.25:1 indicating a broader bullish trend. Volatility continues to climb despite the bullish price action suggests that shorts are scampering to cover leading to the panic. Our expected target of 5735 was nearly tested before profit taking pulled the index to close below the 5700 mark. Nonetheless, the underlying momentum continues to be strong as the RSI trades above the overbought threshold of 70. Nifty maintained its bullish trend for the third consecutive week and is likely to trade positively in the coming week as well. We expect the index to target the upper boundary of the four-month trend channel at 5750 and possibly manage to even test the 5800 mark. Volatility is expected to remain at elevated levels due to the September series derivatives settlement on Thursday. On the downside, immediate supports lie deep at 5535 / 5527.


High beta sectors powered their way up in the session led by Cap Goods (+4.12%), Metals (+4.06%), Power (+4.35%) and Banking (+4.05%) indices. The only losing sector of the day was IT with loss of 0.68%. Broader market indices failed to match up to the momentum on frontline index with gains of 1.6% for the Mid-cap index and 1.45% for the Small-cap index.



Bullish Setups: CNXBANK, BHEL, DLFU, POWF, SHRS, TPWR, LANCI

Bearish Setups: TCS, DRRD

�� -->