NIfty Index Chart Analysis

Indian markets began the week on a jittery note attributed to the key element, the GST Bill and the U-turn that the matter of its clearance took. Thereafter, the market moved in a range. On December 15, 2016 the market opened with a gap down, as US Fed hiked rate by 25 bps, even though this was well anticipated. But, it was the hawkish tone that put pressure on markets. In the end, markets ended the week on a negative note with losses of 1.48 per cent, on a w-o-w basis. 

During the week, the Retail Inflation,measured by Consumer Price Index (CPI) was declared, which fell to a two-year low in November 2016 at 3.63 per cent and the WPI inflation came in lower at 3.15 per cent, indicating that demonetisation was curbing inflation too. The trade data was slightly below the mark with a sharp spurt in gold imports taking the trade deficit to a 2-year high. Technically, Nifty on the weekly time frame chart has formed a reasonable bearish candle, within a high-low range of the previous long range bull candle, suggestive of the formation of a ‘Bearish Harami’ or an "inside day" candle pattern.This candlestick pattern is considered as a reversal pattern.

The pattern consists of two candlesticks. In addition, on the daily time frame, Nifty index is trading below its important long term moving average i.e. 200 Day Simple Moving Average, which is placed around levels of 8222. The opening downside gap, which was formed as on December 12, 2016 in the range of 8242-8230, at present is acting as a stiff resistance zone.

Now going forward, the zone of 8110-8120 is a key support zone as defined by the upward rising trend line, which has been formed by connecting important lows from the recent swing low of 7916.40. A close below this trend line, i.e. 8110-8120, is likely to open gates for correction up to levels of 8040. However, if Nifty fails to find support around these levels, it's likely to test levels of 7900 on the downside.On the upside, immediate resistance for Nifty is placed around levels of 8230-8245, and a close above these levels is likely to provide strength to the bulls, attempting to test levels of 8340 on the higher side.The Daily 14-period RSI at present is quoting around levels of 44. 

It has recently turned down after registering high of 51 as on December 12, 2016. Now going forward, if it moves below levels of 40, then one may expect selling pressure to intensify. Nifty index may continue to oscillate in a range due to lack of major domestic triggers and ongoing Christmas and New Year Eve celebrations could limit the activity and volumes on the markets. However, the key level to watch out on the downside is 7900. If this support is breached, expect sentiments to shift in the favour of bears.

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The stock, Allied Digital Services is currently trading at Rs.37.45. Its 52 week high/low stands at Rs.64.80/ Rs.25.85, which were made as on January 05, 2016 and November 16, 2016. Recently in the second week of December 2016, the stock has witnessed fresh 'bullish breakout' at Rs.34.10, which is its 200-day EMA level. The stock actually has formed 'Bullish Engulfing' pattern at the same level, with highest volume from last 5 years. On the lower side, the stock may take immediate support at Rs.38.20 and Rs.36.90, which are 15-day EMA and 20-day EMA levels respectively. Looking at 1 year weekly chart, the stock has formed 'V' pattern, which indicates a medium-long term positive momentum ahead. Overall calculating all the parametres, it is anticipated that the scrip may continue with its upward trend. We recommend a buy in the stock of Allied Digital Services.

The stock of Trident is currently trading at Rs.58.25 level. Its 52 week high and low stands at Rs.37.30/ Rs.63.30 made on October 21, 2016 and February 12, 2016. During the last six months, the stock has been trading in a wide consolidation phase, and during the course, the stock has formed multiple bottoms in the range of Rs.48-Rs.50. Since, November 21, 2016 the stock has witnessed upmove from the level of Rs.49 to form 'higher top higher bottom' to touch the technical level of Rs.60. In this momentum the stock also has broken crossover of Rs.55.50 and Rs.57.30, which are 50-day EMA and 20 day EMA levels. Moreover, the momentum oscillator RSI comes at 61-62 , and it may continue with its upward momentum. Looking at the current scenario the stock may again cross 52-week high. By taking into consideration all the parametres, we recommend buy in Trident.