MARKET TREND FOR WEDNESDAY, JANUARY 18, 2017
The Equity Markets headed nowhere on Tuesday as the opening
levels saw resistance coming in exactly at 100-DMA as the benchmark NIFTY50
came off during the day to end the day with a minor loss of 14.80 points or
0.18%. All indicators clearly point towards consolidation continuing in the
Markets and the 100-DMA level which stands at 8436 will continue to remain and
act as immediate resistance for the Markets in the immediate short term. There
are clear signs of some fatigue creeping in to the Markets and this may prevent
the NIFTY50 from giving any runaway rise. It may continue to oscillate in a
given range.
For today, 8440 and 8495 will act as immediate resistance
levels while the supports to NIFTY will come in at 8365 and 8320 levels.
The Relative Strength Index – RSI on the Daily Chart is
64.9643 and it shows no bullish or bearish divergence or any failure swings. It
continues to remain neutral. The Daily MACD is bullish while it trades above
its signal line. No significant formations are observed on Candles.
NIFTY January series point towards some minor profit taking
happening at higher levels. It shed over 4.53 lakh shares or 2.25% in Open
Interest.
While having a look at pattern analysis, it is very much
evident now that the after a decent recovery of 500-odd points from the Double
Bottom support formation at 7900-7920 zones, the equities are showing clear
signs of range bound consolidation once again. However, it also becomes
important to note that the Markets continue to trade above all of its critical
support levels and is currently consolidating in a given range which is in fact
healthy for the Markets. The Bollinger Bands are 43.80 wider than normal on the
Daily Charts. This denotes increased volatility in NIFTY than its normal range.
The probability of volatility decreasing and prices remaining in a trading
range increases with such formation.
All and all, ranged consolidation is likely to continue and
the levels of 100-DMA will continue to remain key levels to watch for. Sector
rotation has begun to show once again and we will see some sectoral
out-performance in coming days. There is not structural breach on the Daily
Charts so long as the NIFTY trades above 200-DMA which will remain its crucial support
in such times of consolidation. While a
healthy consolidation happens, select stock specific purchases may be
continued.
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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