Friday, January 13, 2017

Daily Market Trend Guide -- Thursday, January 12, 2017

MARKET TREND FOR THURSDAY, JANUARY 12, 2017
Perfectly on the analyzed lines, the Indian Equities staged a decent upsurge moving past it’s all important 200-DMA and ended the session yesterday with a decent gain of 92.05 points or 1.11%. Yesterday’s up move is significant in more than one ways. It has not only confirmed the bottoms at 7900-7920 zones by forming higher tops, but it have also further broken out from a broad trading range. Speaking purely on a technical note, we expect a positive opening and the NIFTY is likely to continue with its up move at least in the initial trade. The gain has thrown up couple of other positive technical indications as well which is all likely to aid the further up move is likely to head towards its next logical target of 8450.

For today, the levels of 8140 and 8450 will act as immediate resistance levels for the Markets. The supports come at 8355 and 8310 levels.

The RSI—Relative Strength Index on the Daily Chart is 65.3531 and it has made its fresh 14-period high which is distinctly Bullish. It does not show any bullish or bearish divergence vis-à-vis the price movement. The Daily MACD is firmly bullish while it continues to trade above its signal line. On the Candles, a rising window has occurred. This usually implies continuation of the uptrend. More so when there have been 4 rising windows in the past 50 days which makes this even more bullish.

The NIFTY January futures have added over 6.45 lakh shares or 3.45% in Open Interest. This clearly indicates that the up move that we saw in the previous sessions is supported by fresh longs.

Pattern analysis suggests couple of important things. First, it clearly confirms the current lows of the 7900-7920 zones as its immediate supports. Secondly, the NIFTY has achieved a further break out on the upside from its broad trading range that it had formed over last more than two months. Further, it has also successfully moved past the 200-DMA and closed well above it. Also, it has closed 2.7% above the upper Bollinger Band. This formation when read along with other lead indicators the upward trend has good chances to continue barring few intermittent consolidations.

Overall, from look at all of the above indicators, the patterns and the F&O data, it is very much likely that the NIFTY move upwards with its next logical targets of 8450. It would be around these levels that we might see some pause. Until this happens, we will continue to see the undercurrent remaining buoyant and corrections remaining limited to intermittent profit taking bouts. Sectors like PSUBANKS, ENERGY, FMCG, etc will see distinct outperformance over others.

Milan Vaishnav, CMT 
Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)

Member
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA



+91-98250-16331 

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