MARKET TREND FOR WEDNESDAY, JANUARY 04, 2017
Much as expected, the Indian Equities continued to
consolidate on the Daily Charts and ended yet another day on a flat note ending
with nominal gains of 12.75 points or 0.16%. The Markets continued to display
inherent strength as it came off its intraday lows, while also resisted to its
prescribed levels. Today, we once again expect a flat to positive start. At the
same time, we still do not expect a runaway up move in the NIFTY and expect the
consolidation to continue but with a positive bias. The level of 200-DMA which
is 8268 today will remain the key level to watch out for. Until the NIFTY moves
past this level, we will continue to see range bound consolidation in the
Markets.
For today, the levels of 8220 and 8270 will act as immediate
resistance levels for the Markets. The supports come in at 8150 and 8115
levels.
The RSI—Relative Strength Index on the Daily Chart is
54.1561 and it has reached its highest value in last 14-days which is bullish.
It does not show any bullish or bearish divergence. The Daily MACD is bullish
as it trades above its signal line. On the Candles, a spinning top has
occurred. This indicates indecisiveness but at the same time, the overall
pattern of the Charts exhibits some amount of healthy consolidation.
On the derivative front, the NIFTY January futures have
added over 1.98 lakh shares or 1.17% in Open Interest.
If we have a look at pattern analysis, after forming a
Double Bottom support in the zones of 7900-7920 levels, the NIFTY has formed a
broad trading range with the levels of 8250-8275 zones acting as its upper
pattern resistance. The zone of 8230-8270 also has 50-DMA and 200-DMA and both
of these levels are likely to pose resistance at Close levels. Before we see any
runaway rise, it would be critically important for the Markets to move past the
200-DMA. Until this happens, consolidation in a broad range will continue.
Overall, we should also note one important point that after
a pullback of nearly 300-odd points, the NIFTY has not corrected at all at
Close levels. While giving intraday swings, it has remained flat on Close
levels. This is a clear sign of inherent strength in the Markets. Given the
overall technical structure of the charts, reading the position and pattern of
lead indicators, and taking some cues of F&O data, we can once again
continue to fairly observe that though it may be a while before NIFTY gives a
runaway rise, any consolidation will remain limited. Some consolidation might
be there in form of intermittent downswings but inherent strength continues to
remain intact.
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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