Monday, May 29, 2017

MARKET OUTLOOK FOR FRIDAY, MAY 26, 2017

MARKET OUTLOOK FOR FRIDAY, MAY 26, 2017
In our Thursday’s note, we had mentioned about the existence of short positions. The benchmark NIFTY50 saw a huge relief rally primarily fuelled by short covering and supported by some fresh buying as well as the NIFTY50 ended the day with strong gains of 149.20 points or 1.59%. The zone of 9380-9420 has once again re-established itself as a strong intermediate support zone. Though we expect a quiet start tomorrow, we will now see Markets consolidating once again near the rising trend line as a clean breakout is yet to take place.

The levels of 9525 and 9580 will act as immediate resistance levels while supports will come in at 9470 and 9430 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.2407 and remains neutral showing no divergence against the price. The Daily MACD still remain bearish while it trades below its signal line. A big white candle occurred. The importance of the formation is that this big candle has occurred near the support zone. This has re-established the credibility of the support zones of 9380-9420.

The pattern analysis shows the Markets bouncing back from the support zone of 9380-9420 and again resisting to the rising trend line drawn from 9200 levels. The rising nature of the trend line is helping NIFTY form fresh highs but it is still keeping it away from  achieving clean breakout.

All and all, despite Thursday pullback, a clear breakout is yet to be achieved. Until the NIFTY achieves such breakout, it remains prone to consolidation once again. We reiterate avoiding shorts at any higher levels and contrary to this, utilize the consolidation, if any, to make select purchases.

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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