MARKET OUTLOOK FOR FRIDAY, MAY 05, 2017
The Indian Markets consolidated on a positive note on
Thursday and had a buoyant session while it ended with net gains of 47.95
points or 0.51%. The benchmark NIFTY50 has gone on to end at yet another record
high on Close charts but there are plenty of signs that show that the
consolidation will continue and the NIFTY is likely to see some volatility at
higher levels while keeping the underlying sentiment very buoyant and intact.
Friday is expected to see a quiet opening but the up move are likely to meet
with volatility and intermittent profit taking bouts. The Index remained mainly
supported by banks.
The levels of 9380 and 9425 are likely resistance levels on
the Daily Charts. The supports come in much lower at 9275 and 9250 zones.
The Relative Strength Index – RSI on the Daily Chart is
67.2032 and it has shown Bearish Divergence as the NIFTY formed a fresh
14-period high while RSI did not. The Daily MACD still remains bullish. On
Candles, a long lower shadow has occurred. This reinforces the importance of
the resistance levels at which it occurred and also holds the potential to
halting the up move when occurs near resistance.
The pattern analysis continues to show buoyant
undercurrents. On the Close Charts, the
NIFTY has ended at fresh high while on
the intraday Chats; it is yet to mark a fresh high. It continues to trade
sideways in a very narrow zone and it explicitly shows which is known as
“classical consolidation” in very strong and buoyant markets.
All and all, we continue to reiterate very high caution at
current levels. Despite underlying buoyancy, the Markets still remain evidently
prone to sharp and volatile profit taking bouts. The best approach to such
markets would be first to strictly avoid shorts and second; cautiously picking
good quality stocks who has relatively under-performed and effectively rotating
sectors.
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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