Daily Technical Report
February 02, 2015
Sensex (29183) / Nifty (8809)
Exhibit 1: Nifty Daily Chart
The concluding session of the week, Friday, opened slightly
higher and the market then traded with immense pessimism
throughout the day owing to poor 3QFY2015 earnings
recorded by some major banking stocks. As a result, the
Nifty closed with more than one and half a percent of loss
for the day. Barring the Realty, Power and IT, all other
sectors ended in the negative territory amongst which the
Banking, Auto and Consumer Durables were the major
losers. The advance to decline ratio was in favor of the
declining
counters.
(A=1194 D=1669) (Source-
Formations
The ’89-day EMA’ and the ’89-week EMA’ are placed
at 27549 / 8276 and 24033 / 7199 levels, respectively.
Source: Falcon
The ’20-day EMA’ and the ‘20-week EMA’ are placed
at 28549 / 8614 and 27605 / 8294 levels, respectively.
Actionable points:
Trading strategy:
The Nifty came near the milestone 9000 mark (although it
View
Neutral
couldn’t surpass it) despite witnessing some amount of
Resistance Levels
8850 - 8920
volatility and uncertainty. The index had a dream run, with it
Support Levels
8775 - 8720
gaining for ten consecutive sessions post the Reserve Bank
of India’s (RBI) surprise 25bp rate cut move on January 15,
2015. However, poor set of earnings by some banking
However, we are in two minds because the Friday’s fall
heavyweights on Friday applied brakes on the ongoing
was mainly led by the financial stocks while we have not
optimism. Finally, the ten-day winning streak came to an
witnessed a weakness across the broader market. The
end as financial stocks tumbled on the concluding session
market has been in a bull trend over the past few months,
of the week. The Nifty missed the magical figure of 9000 by
and the few whipsaws we saw are a part of the market’s
a whisker (posting a high of 8996.60). In our previous
trending pattern as has been seen during previous bull
report, we had clearly mentioned about the Nifty continuing
runs. Thus, in order to form a near term directional view,
it’s up move towards the 8950 - 9000 levels; the index
we would want to closely observe the coming Monday’s
trended in line with our anticipation. We had also stated the
price action. The first scenario would be that if the Nifty
possibility
of some profit booking around the
sustains below the 8850 mark and then witnesses a
aforementioned levels, which materialized as well.
strong selling pressure in the heavyweight counters, then
the possibility of a near term correction towards 8700 -
The Nifty has now closed below its ‘5-Day EMA’ level of
8650 increases. In the other scenario, if the Nifty
8850 for the first time in the last eleven trading session.
manages to regain its position beyond the 8850 mark
Generally, a closing below this short term moving average
convincingly, then it may resume its higher degree
after a vertical rally indicates exhaustion of the trend or
uptrend to move towards 9000 - 9050 levels.
weakness in the near term. The daily ‘RSI’ momentum
oscillator too has turned down from the overbought
The coming week may witness some volatility on the back
territory, to confirm a negative crossover. Going by these
of important events like the RBI’s monetary policy on
technical evidences, and the Nifty facing a strong resistance
Tuesday. It’s advisable to trade with proper stop losses
around the 161% reciprocal retracement of the fall from
and avoid taking undue risks.
8626.95 to 7961.35, coupled with the depiction of the
higher end of the ‘Megaphone’ pattern on the weekly chart;
the possibility of a further correction towards 8700 - 8650
on the Nifty cannot be ruled out.
1
Daily Technical Report
February 02, 2015
Bank Nifty Outlook - (19844)
Exhibit 2: Bank Nifty Daily Chart
On Friday, the Bank Nifty too opened slightly higher and
then tumbled by more than three percent on the back of
poor set of Q3FY2015 numbers by the banking
heavyweights, the ICICI Bank and Bank of Baroda. The
Bank Nifty witnessed a tremendous selling pressure
immediately after the violation of Thursday’s low of
20338. The index couldn’t even stop at 20100 - 20000
levels. At this juncture, the Bank Nifty has reached it’s
hourly ’89 EMA’ level of 19800, which can be considered
as a strong support. Going forward, we may see
immediate bounce back towards 20000 - 20100 levels.
However, if the index fails to sustain beyond 20100 then
we may see Bank Nifty re-testing 19800 - 19700 levels.
The correction may extend towards 19500 - 19400 levels
if the index slips below the 19700 mark. Similar to the
Nifty, we would closely observe above mentioned levels.
Actionable points:
View
Neutral
Resistance Levels
20000 - 20100
Source: Falcon
Support Level
19700
2
Daily Technical Report
February 02, 2015
Research Team Tel: 022 - 30940000
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