Market Summary

On Friday, i.e. 18.3.2016, the NIFTY 50 index closed at 7604.35, up by 91.80 points or +1.22%. The overall market
breadth remained in favour of the bulls with 44 advancing stocks and 6 declining stocks. The Top 5 NIFTY Gainers for the
day were, VEDL (+7.83%), HINDALCO (+5.49%), ACC (+4.97%), BOSCHLTD (+3.26%) and ADANIPORTS (+3.05%).
The TOP 5 NIFTY Losers for the day were LUPIN (-6.91%), SUNPHARMA (-1.31%), BPCL (-0.91%), POWERGRID (-
0.87%) and HINDUNILVR (-0.49%).

In terms of Sectoral Indices, NIFTY METAL (+2.53%) gained the most followed by NIFTY PSU BANK (+2.22%), NIFTY IT
(+2.16 %), NIFTY REALTY(+1.88%), NIFTY BANK(+1.37%), NIFTY AUTO(+1.36%), NIFTY FIN SERVICE (+1.36%),
NIFTY PVT BANK (+1.26%), NIFTY MEDIA (+0.71), NIFTY ENERGY (+0.58%) and NIFTY FMCG(+0.57%). On the flip
side, NIFT PHARMA (-1.2%) was the only sector that closed in red.

NIFTY 50 INDEX ANALYSIS

To have a better perspective on the major trend of the market let’s start with a monthly chart of the NIFTY 50 index.

NIFTY 50 INDEX/ MONTHLY

Observations:

1. Long-term price channel off the 2003 lows (highlighted by blue dotted lines): The support line of the channel (XX’)
connecting the crucial long-term lows of 2003 and 2008 beautifully supported the market in 2013 at point P.
However, it was breached in January 2016 to the downside heralding the beginning of downtrend.
2. Major support for the market is at 6338.50 (highlighted by red dotted horizontal line): The red dotted horizontal line
connecting the highs of 2008 and 2010 was breached on the upside in March 2014. This level would now act as
support on the way down.
3. Short-term channel support line BB’ has not been reached yet signifying that the downside is still open.
4. Probable scenario: .For the very near term prices may rally to the lower end of the long-term price channel XX’
(8040), which may now act as resistance.

NIFTY 50 INDEX/ WEEKLY

Observations:

According to the weekly chart of NIFTY, prices have been steadily trending downwards since March 2015. However, a
positive divergence has been observed between prices and the 14-day Money Flow Index (MFI). This is indicative of the
fact that the selling pressure is dissipating as the prices move lower. In other words, supply is drying up. The next
resistance area is the upper trendline AA’ at 7975. If that level is breached and NIFTY closes above it, the subsequent
resistance areas would be 8340-8650-9120. However, if it fails to take out the overhead resistance line, then we might
see some selling entering the market again.

NIFTY 50 INDEX/ DAILY

Observations:

1. NIFTY had been consolidating in the range of 7400 -7550 for the past few sessions. On 18.3.2016, it broke out of
that range and closed above it. On the upside, the next resistance zones are 7690-7720 and 7970-8000.

International Markets

All the US indices are marginally in the green. Gold is marginally in the red while Oil is down by about 2%. All the
European indices except the FTSE100 are trading in the green. All the Asian indices except Nikkei 225 are trading
moderately in the green.

To conclude, we can say that NIFTY is trading with a positive bias right now and higher prices is the most probable
scenario in the very near term.