MARKET OUTLOOK FOR WEDNESDAY, AUG 09, 2017
Indian Equity Markets remained under corrective pressure on
Tuesday as the benchmark NIFTY50 slipped below the 10000-mark closing at
9978.55 while losing 78.85 points or 0.78%. The Markets found a reason to correct
while the watchdog SEBI put 331 companies in the “shell companies” list. Even
without this development, the Markets anyway technically remained prone to
corrective pressure. In coming days, while the levels of 10114-10150 remain an
immediate top for the Markets, technical pullbacks cannot be ruled out as the
Markets have added heavy Open Interest with the decline.
The levels of 10030 and 10110 will act as immediate
resistance levels for the Markets while the supports will come in at 9970 and
9910 zones.
The Relative Strength Index – RSI on the Daily Chart stand
at 56.6217. It has marked a fresh 14-period low and this is a bearish sign.
Also, the RSI has set a fresh 14-period low while the NIFTY has not yet and
this has resulted in Bearish Divergence. The Daily MACD stays bearish while
trading below its signal line.
The NIFTY August futures have added massive 12.74 lakh
shares or 5.87% in Open Interest. This is a big indication of heavy fresh
shorts being initiated in the system.
Overall, as of today, the Markets have taken support at its
short term 20-DMA level. Any breach below this will see Markets testing the
pattern support of the rising trend line drawn from 9200 levels. However, we
reiterate to strictly avoid any aggressive shorts because looking at the amount
of Open Interest that the Markets pile up with each decline, it may see equally
sharp and volatile technical pullback
from lower level as well. Overall, modest exposure on either side with enough
preservation of liquidity is advised for the day.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
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