MARKET OUTLOOK
FOR WEDNESDAY, NOV 22, 2017
In our previous note, we had expressed strong concerns about
Markets resisting to the 10345-10365 zones. In line with this analysis, the
NIFTY50 Index saw retracement after testing highs at 10358.70. Going into to trade
on Wednesday, we expect a quiet start to the Markets. The zones of 10345-10365
will continue to pose stiff resistance to the Markets in general. We will see
sustainable rally in the immediate short term only if these levels are meaningfully
surpassed despite the fact that the long term setup remains buoyant and the
primary trend remains perfectly in place.
Wednesday’s session will see the levels of 10365 and 10390
continuing to act as resistance levels for the Markets. Supports come in at 10275
and 10180 zones.
The Relative Strength Index – RSI on the Daily Chart is 56.4124
and this remains neutral showing no failure swings or divergences against the
price. Daily MACD stays bearish while it trades below its signal line. Mixed
signals emerged on Candles. A rising window emerged which essentially is a gap and
implies continuation of the up move. But at the same time it also had a long
upper shadow. When such formations arise, it can damage the impact of a rising
window and nullifies the expected bullish implications arising out of it.
Pattern analysis confirms that the NIFTY has managed to
cling to its short term 20-DMA which is 10318. It will have to stay above this
to avoid any short term weakness in the immediate near term.
All and all, NIFTY50 came off from the highs of the day and
resisted fiercely to the 10345-10365 zones. While doing so, it has shed Open
Interest. We can fairly conclude that the Markets saw some long unwinding at
lower levels. From the technical structure of the Charts and reading F&O
data along with it, we fairly feel that we will see consolidation continuing in
the Markets in the immediate near term despite the primary trend remaining
intact. For any meaningful up move the levels of 10365 will need to be
surpassed. Until this happens, we continue to recommend remaining highly stock
specific and continue to protect profits at each higher level.
Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
CMT Association (Formerly known as Market
Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA),
CANADA
Society of Technical Analysts (STA),
UK
+91- 70164-32277
/ +91-98250-16331
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