Thursday, October 20, 2016

Daily Market Trend Guide -- Thursday, October 20, 2016

MARKET TREND FOR THURSDAY, OCTOBER 20, 2016
The Markets on Wednesday traded precisely on analyzed lines as it continued to resist to the 8690-8700 zones for the entire trading day before ending the day with marginal losses. Today, the analysis remains more or less on similar lines once again. We will see NIFTY continuing to resist at 8690-8710 zones and these level will continue to pose some formidable resistance before NIFTY resumes its up move. Volatility and choppiness will continue to remain ingrained in the Markets.

For today, the levels of 8690-8710 and 8755 will act as resistance for the Markets. The supports will come in at 8620 and 8575 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.01 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains Bearish as it trades  below its signal line.

On the derivatives front, the NIFTY October futures have shed yet another 4.50 lakh shares or 2.45% in Open Interest. This indicates continuing offloading of long positions in the system.

Coming to pattern analysis, the neckline levels of descending triangle pattern that the Markets breached on the downside are acting as resistance in the times of pullback. The zones of 8690-8710 will continue to resist until the NIFTY sees a successful resumption of up move. Until this happens we will continue to see NIFTY oscillating in a broad trading range with some amount of volatility ingrained in it.

Overall, we will not see any meaningful up move only after NIFTY moves past the levels of 8755-8775 zones which will take it out of the falling channel it has formed. Until this happens, we will see NIFTY continuing to remain vulnerable to selling bouts from higher levels. Though stock specific out performance will continue, we continue to reiterate our cautious view on the Markets today.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA

http://milan-vaishnav.blogspot.com


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