Published on 10/07/2017 3:42:35 PM | Source: GEPLCapital Ltd
Prices however twice during the week failed to cross the previous swing high - GEPL
1. As on 07.7.2017, the long term moving averages stand as below: 50 DMA @ 9524, 100 DMA @ 9286, 200 DMA @ 8848. The NIFTY now trades above all the three averages, and each of the 3 averages are equi-spaced, indicating a good BASE for the long term.
2. On the Index Futures side, both the FIIs as well as RETAIL have reduced the Index futures HOLDINGS further, in spite of the fact that a new derivatives cycle is through. FIIs have reduced their LONGS now @ (+1.30L vs +1.51L contracts a week earlier); as on RETAIL side too there is a reduction to the Index futures SHORTS (-66k vs –1.11L contracts a week earlier).
3. The INDIA VIX, maintain a status quo after showing intra-week volatility. It moved DOWN a good 7.3% to close @ 10.87 as against the levels of 11.72, a week earlier. The multi-year LOWS on Weekly closing basis stand @ 10.63, underlying a slightly “NON-TRENDING” patch in the near future.
4. Higher time frame still remains mildly BULLISH with 'HIGHER TOP HIGHER BOTTOM' formation being intact in it’s own, given the fact that the index almost created a new all-time HIGH. However a MEAN-REVERSION is seen in prices last week, indicating a bit of nervousness at higher levels in the SHORT -TERM.
Inference & Expectations:
* A watchful session ended on Friday with the loss of 8.75 points or 0.09% at 9665.80 for Nifty 50. Surprisingly, the breadth Index was on the positive side with 940 advances against 785 declines on NSE.
* The week started with a gap up and with strong optimism ended with a bullish candlestick pattern similar to ‘Separating Lines’.
* Prices however twice during the week failed to cross the previous swing high and formed a series of bearish candle ‘Spinning Top’ and ‘Dragon Fly Doji’ on the daily chart. Hence, while the higher time frame looks bullish some weakness is seen in short term around 9700 levels and fresh momentum up move can only be expected on a sustain close above 9710 levels.
* On the flip side, Immediate support is seen around last two session’s low around 9640 followed by 9600 @ 20DMA.
* Levels to watch on the upside 9714/9755/9771.
* Levels to watch on the downside 9634/9597/9530.
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