MARKET OUTLOOK FOR THURSDAY, AUG 17, 2017
As analyzed in our previous note, the Markets not only
continued with their up move but also saw the shorts being covered up and being
replaced with fresh longs. The benchmark NIFTY50 saw a decent rally on Wednesday
and ended the day with net gains of 103.15 points or 1.05%. In all likelihood,
the Markets will continue with their up move on Thursday as well. Barring some
consolidation, if at all if there is any, the Markets will be seen attempting
to test the 20-DMA levels and will probably try to move beyond that. A buy
signal on Stochastic has also emerged on Daily Charts with a bullish divergence
in the direction of the major trend.
The levels of 9950 and 9985 will see acting as immediate
resistance levels. Supports are likely to come in at 9840 and 9810 zones.
The Relative Strength Index – RSI on the Daily Chart is
50.9435 and it remains neutral showing no divergence. The Daily MACD remains
bearish while trading below its signal line but it is sharply narrowing its
trajectory.
The Wednesday’s up move has come in with an addition of over
2.60 lakh shares of 3.3% in NIFTY Futures of the current month. This shows that
not only the shorts were covered but
they were replaced with fresh longs as
well.
The pattern analysis shows that the Markets have firmly
taken support at the lower support line of the channel that it has been trading
in. This support also coincide with the 50-DMA and therefore this zone has now
reinforced itself as a major pattern support for the Markets.
Though we not see Markets racing towards new highs but we
can certainly expect the Markets to continue with the up move from current
levels. It is likely to test 20-DMA and might consolidate there. We recommend
strictly avoiding shorts and continue to make modest purchases with any minor
corrective decline that is seen. Positive outlook is advised for the day.
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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