Sunday, May 21, 2017

MARKET OUTLOOK FOR WEDNESDAY, MAY 17, 2017

MARKET OUTLOOK FOR WEDNESDAY, MAY 17, 2017
The Indian Equities continued to enjoy the liquidity driven gush as the benchmark NIFTY50 continued to scale fresh highs and ended the day on a fresh life-time high as well. We cannot ignore the liquidity fuelled upsurge that the domestic markets are currently witnessing but at the same time, also it would not be wise to continue to blindly chase the stocks with badly overstretched indicators. We expect a positive opening to the Markets on Wednesday and upward tendencies might persist. At this juncture, it would be extremely important to protect existing profits at higher levels and effectively churn sectors to rightly participate in the uptrend.

The levels of 9525 and 9560 will now act as likely resistance levels. The supports come in at 9460 and 9410 zones.

The Relative Strength Index – RSI on the Daily Chart is 71.9469. Though it is bullish as it has marked a fresh 14-period high, it now remains in overbought territory. The Daily MACD is bullish while staying above its signal line. A rising window occurred on Candles. This is essentially a gap and it usually has bullish implications.

The pattern analysis suggests that the NIFTY has managed to move beyond the rising trend line resistance that it was witnessing over past couple of days. Though this implies a breakout, caution needs to be exercised as the Markets are now overbought. The zones of 9350-9375 which the immediate resistance zone is now expected to act as support.

All and all, given the underlying buoyancy intact, there are all chances that the Markets may take a breather either on Wednesday or in immediate future. The downsides in such an event are likely to remain extremely limited. We reiterate protecting profits at higher levels and effective shift sectors to avoid minor corrective activities. The sectors who had been laggards in the past like IT, AUTO, etc are expected to now participate.

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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