Technical view will remain positive till the time index stays firm above 7830.

Source: Reliance Securities Ltd

Technical Research

MARKET SYNOPSIS

  • On Wednesday, NIFTY-50 begun the session on stable note, but after registering high of 7,945 level oscillated in 7,925- 7,940 range till late noon trades in absence of major headlines in the market. Later, due to sharp decline index slipped to 7,890 mark and finally, shut the shop with loss of 33 points at 7,896 level.

  • NSE Cash segment turnover once again witnessed marginal improvement as compared to previous trading session, where it rose to Rs14,636 crores from Rs Rs14,484 crores earlier.

  • Overall market breadth remained negative, where 717 stocks advanced against 801 declined stocks.

  • Mixed trend was witnessed amongst sectoral indices during the day, where MEDIA emerged as a top gainer with increase of 1.9%, however, on the other hand PSU BANK & IT emerged as top losers with decrease of 1.1% & 1.2% respectively.

 

CNX NIFTY OUTLOOK

*  NIFTY-50 failed to continue previous positive momentum (higher top higher bottom formation) on the daily chart and finally, ended with Bearish Engulfing pattern. Though, index lost 7,900 mark, closed above its short-term moving average 50-days EMA. Our near-term technical view will remain positive till the time index stays firm above its 20-days EMA (placed around 7,830 mark), but any close below that average will be negative, as (i) bearish candlestick formation on the daily chart, (ii) overbought position of Stochastic (5,3) and (iii) fall in RSI (14,9) has indicated possibilities of trend reversal. On the higher side, 8,000 mark will work as key reversal point for the index, however on the lower side, NIFTY will find support around 7,740 level (38.2% Fibonacci Extention level of prior fall).

  • As for the day, support is placed at 7,850 and then at 7,800 levels, while resistance is observed at 7,945 and then at 7,980 levels.

 

Intraday Picks

CROMPTON GREAVES (LTP: 191) SELL

For today’s trade, short position can be initiated only in Rs193-195 range for target of Rs188 with a strict stop loss of Rs196. Traders are advised to avoid early morning whipsaw.

DIVISLAB (LTP: 1159) SELL

For today’s trade, short position can be initiated only in Rs1172- 1180 range for target of Rs1142 with a strict stop loss of Rs1186. Traders are advised to avoid early morning whipsaw.

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