Weekly Nifty and Sector Technicals :: HDFC Securities

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Observation:
 Week’s action formed a bear candle with good amount of lower shadow which indicates the volatility in the prevailing
trend (Now index is in downtrend).
 The two best probabilities scenario has ended as the index fell sharply after the 12 days of retracement rise from 7960
to 8445 levels, the top of 8445 is the significant lower top which matches with all characteristics of “wave b/ii” and the
lower bottom of 8065 validates the same.
 As per our preferred wave count; index has completed the “wave v” at 8626; and it has started new falling leg from
the high of 8626. The initial fall witnessed from 8626 to 7960 is an internal “wave a / i” and the second rise from 7960
to 8445 level is “wave b / ii” of larger degree wave. In the next falling leg we could confirm that the existing fall is
either “Flat or Zigzag” pattern. As per recent price development index has the potential to slide down towards 7700
– 7300 levels, this view would come under threat if index moves above 8450 levels.
 On weekly index have been forming a lower top and lower bottom which is significant bearish stance and on monthly
chart, index has formed Engulfing bear candle at life time high; this adds additional strength to the bearish stance.
 RSI oscillator is continuing with couple of negative divergences on weekly charts.
 The BSE mid cap index clearly shows that five advance has completed at 10625; as long as index holds this level, Nifty
may remain in bearish phase.


Observation:
 Day’s action formed long legged doji at resistance zone which is a significant bearish reversal sign but confirmation of
pattern would available on a fall below 8190.
 Technically, as we had indicated, the bounce move has extended to 50% & 61.8% retracement level of last fall i.e.
placed at 8256 & 8300 levels. Market was highly volatile in this band and sharp ups and downs have been witnessed.
 Though the index has closed with gains, the recent price developments and formations are not in favor of bulls. The
level of 8303 (Friday’s High) could act as vital resistance in the near term. It seems like the counter trend or a relief
rally of earlier falling leg has ended with lower top and index could start falling. On worst case if index breaches the
8303 then bulls could gain further strength to cover the gap zone of 8327 to 8364 witnessed on Jan 06, 2015.
 Trend wise index remains in a downtrend and the lower top of 8450 would act as stiff resistance. The visible targets
for short term based on the current price developments are 7960 – 7700 levels.

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010632