Thursday, August 3, 2017

MARKET OUTLOOK FOR THURSDAY, AUG 03, 2017

MARKET OUTLOOK FOR THURSDAY, AUG 03, 2017
The Indian Equity Markets ended the day with a modest loss of 33.15 points or 0.33% as the Repo Rate cut of 25 bps failed to enthuse the Markets. There was nothing wrong with the 25 bps rate cut as it was what was widely expected by the participants. The reason of the Markets not performing was very much technical as the technical factor weighed heavy on the Markets. In the coming days as well, we will continue to see the technical weighing heavy and as of today, the levels of 10114 will continue to act as a temporary top for the Markets until it is breached significantly.

The levels of 10114 and 10160 will act as immediate resistance levels for the Markets. 
Supports come in at 10010 and 9960 zones.

The Relative Strength Index – RSI on the Daily Chart is 72.7421. It remains neutral but it also remains in overbought territory. The Daily MACD stays bullish while trading above its signal line. However, it slope suggest that it is moving towards negative crossover if consolidation persist. On the Candles, an Engulfing Bearish Pattern has occurred. It is significant and important as it has occurred during an uptrend and is all likely to temporarily halt the up move and send Markets into either correction or range bound consolidation.

The pattern analysis suggests that the Markets have retraced a bit from a sharp rising wedge formation. However, it trades comfortable above the pattern support of the rising trend line drawn from 9200 levels.

Another highlight of the day was a sharp appreciation in Rupee ahead of the RBI Policy Review. We also feel that this kept IT stocks under some pressure. However, in event of any corrective more, the downsides will remain limited as with the decline on Wednesday has come with a sharp increase in Open Interest which suggests high creation of fresh short positions. All this indicate towards imminent corrective action, less in form of downsides but more in form of volatile range bound movements.

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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