NIFTY WEEKLY REPORT FOR 08 AUG TO 12 AUG 2016

WEEKLY RESISTANCE FOR NIFTY: 8670, 8711, 8770, 8829

PIVOT POINT: 8629

WEEKLY SUPPORT FOR NIFTY :  8570,8511,8470,8429

WEEKLY CHAT FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 8711, 8733, 8746,8760

PIVOT POINT: 8689

DAILY SUPPORT FOR NIFTY :  8675, 8662, 8640, 8630

DAILY CHART FOR NIFTY

Sensex opened the week at 28133, made a high of 28276, low of 27645 and closed the week at 28078. Thus it closed the week with gain of 248 points. At the same time the Nifty opened the week at 8625, made a high of 8747, low of 8547  and closed the week at 8594. Trading for the week ended on a buoyant note as key benchmark indices settled with strong gains as firmness in global stocks boosted sentiment on the domestic bourses. The barometer index, the S&P BSE Sensex rose 363.98 points or 1.31% to settle at 28,076.26. The gains for the Nifty 50 index were higher than those for the Sensex in percentage terms. The Nifty gained 132.05 points or 1.54% to settle at 8,683.15. The Sensex settled above the psychologically important 28,000 level after alternately moving above and below that mark earlier during the day after crossing that mark in mid-morning trade. The Sensex hit more than one-week closing high and the Nifty hit highest closing level in almost sixteen months.

GST – A REALITY; FINALLY

History was created when the Rajya Sabha cleared the historic GST bill on Wednesday. It resulted in profit booking as both the indices came crashing down. Followers of Classical theory were not surprised as the profit booking witnessed in the market only underlined the principle that ‘Price Discounts Everything’. The ‘Sell on News’ phenomena continued till Thursday before the market staged a strong comeback on Friday. Strong Support exists at the first Bullish Gap between 8479-8475 for the Nifty; as long as this support holds one can expect Nifty to reach the Flag target of 8869.

A bullish breakout was observed last week as the Nifty moved well above the 8600 mark. As a result of this, Nifty is now headed towards the Flag pattern target of 8869. The coming week is likely to see high degree of Volatility as the Government will grapple to pass the GST bill. The probability of getting the bill passed has increased and if that happens then the Nifty may well see a surge towards the 8800 mark. But if the Opposition manages to stall the GST bill, then Nifty may well test the strong Support in the form of weekly Bullish Gap between 8407-8398. Global credit rating agency, Moody's Investors Service's statement that Rajya Sabha's approval of the Goods and Service Tax (GST) constitutional amendment bill is a credit positive for India's sovereign and non-financial corporates also lifted sentiment. After opening higher, key indices remained in positive terrain throughout the session. Key indices gained for the second day in a row today, 5 August 2016.

 TECHNICALLY SPEAKINg

 The index behaved precisely in line with our expectations as it resumed upward momentum after nine sessions of consolidation and rallied to achieve our earmarked target of 8650, which is a key hurdle as it is the confluence of 80% retracement of 2015-16 fall around 8660, which also coincides with the monthly swing highs of July & August 2015 around 8654. The 80% retracement of a major directional move is a significant level often triggering market reversals. A decisive triumph above the 80% retracement hurdle (8650) post the GST bill outcome will signal larger positive implications indicating the market has 8654 9119 80% retracement of 2015-16 fall & October 2015 high @ 8654 potential to completely retrace the 2015-16 fall and head to challenge the 2015 life high of 9119 over the medium-term. In the short-term, we expect the index to remain in a rising trajectory and head towards 8850 in the coming month

MACD continues in Sell mode despite being in positive zone. Price ROC has just turned positive and has signalled a Buy. RSI (61) suggests bullish momentum. Stochastic Oscillator %K (50) has just gone above %D; hence it is a fresh Buy. ADX has improved to 29 which suggest that Uptrend is getting stronger. Directional Indicators continue in Buy mode as +DI is above –DI. MFI (45) suggests Negative Money Flow. Thus majority of Oscillators are still suggesting a slight bullish bias in the near term.This week, both the indices tested the short term average of 20dma  Nifty – 8572 but managed to hold and close above it. Both the indices continue to remain well above the medium term average of 50dma Nifty – 8357 and even the long term average of 200dma Nifty – 7857. Thus the trend in the short term, medium term and even the long term timeframe continues to remain Bullish.