MARKET TREND FOR FRIDAY, FEBRUARY 10, 2017
Very much on projected lines, the Indian Equity Markets
played host to large amount of choppiness and volatility as it traded in
oscillated in 100-odd points range on either side and ended the day nearly flat
with nominal gain of 9.35 points or 0.11%. Today is going to be no better as
the NIFTY50 is likely to remain choppy. Post the recent rise, instead of
correcting at close levels, the NIFTY has seen flat endings with large amount
of intraday volatility. Today, we can once again expect a tepid start to the
Markets but the volatility is likely to persist and we will see NIFTY
oscillating in a defined range with all possible downward pressures. The overbought nature of the Markets will
prevent it from a giving a runaway rise.
For today, the levels of 8820 and 8875 will act as immediate
resistance levels while supports will come in much lower at 8720 and 8665
levels.
The RSI—Relative Strength Index on the Daily Charts is
72.07.1 and despite remaining neutral showing no divergence on either side, it
continues to remain in “overbought” territory. The Daily MACD bullish as it
trades above its signal line. However, if the consolidation continues, it might
move towards reporting a negative crossover. On the Candles, an engulfing
line followed by a not-so-classical hanging man which had more
resemblance to a long lower shadow has effective halted the up move for the
moment.
The NIFTY February futures have remained virtually unchanged
shedding just 7,275 shares or just 0.03% in Open Interest. This figure remains
insignificant to draw any conclusion.
Pattern analysis vividly shows virtually no correction at
Close levels. The Close over last couple of days has been nearly flat with
minor gains or losses. The corrections so far have been shallow and the NIFTY
has witnessed shallow oscillations. So far, the levels of 8820-8840 zones now
become an immediate resistance zone. Any up move will occur only after the
NIFTY moves past this level. Given the overbought nature of the Markets, any up
move will sustain only if the Markets gives some healthy consolidation or minor
correction before resuming its up move.
Overall, we continue to reiterate extremely cautious
approach to the Markets. Stock specific performance will continue but the
overall Markets in general will remain heavily vulnerable to selling pressures
from higher levels. Volatile movements and selling pressures from higher levels
will remain evident and therefore, heavy caution is advised with very vigilant
protection of profits at higher levels.
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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