Friday, February 24, 2017

Daily Market Trend Guide -- Thursday, February 23, 2017

MARKET TREND FOR THURSDAY, FEBRUARY 23, 2017
The Indian Equities had an eventful session as the NIFTY went very near to its 52-week high of 8968 levels while forming intraday high of 8960.75. We saw increased amount of volatility creeping in as the NIFTY witnessed bouts of profit taking very much on expected lines. Currently the NIFTY trades near a Double Top resistance area and we will see continued consolidation with increased amount of volatility. This corrective activity in form of a range bound consolidation will be required if the NIFTY has to continue with its up move. Today, we expect a tepid start to the Markets and the levels of 8960-8975 will remain critically important levels to watch out for NIFTY. So long as NIFTY trades below these levels, volatile oscillations will continue to remain. NIFTY would have ended with losses today if not for RELIANCE which single-handedly contributed 54 points to NIFTY.

For today, the levels of 8960 and 8995 will remain critical resistance levels for the Markets. The supports now come in much lower at 8865 and 8810.

The Relative Strength Index – RSI on the Daily Chart is 74.2911 and it continues to display signs of exhaustion. It trades in “overbought” territory and while the NIFTY has made a fresh 14-period high, RSI has not and this has resulted into Bearish Divergence. On the other hand, the Daily MACD has reported a positive crossover and it is now bullish while trading above its signal line. On Candles, A Spinning Top occurred. This often portrays indecision on part of Market participants.

The derivative segment continued to saw increased rollovers. The NIFTY February series saw shedding of 28.31 lakh shares or 17.40% in Open Interest while the March Series added over 36.84 lakh shares or 31.56% in Open Interest. There has been net addition in total open interest.

The pattern analysis clearly shows NIFTY approaching a Double Top formation and it is beyond doubt that this will act as major pattern resistance for the Markets. Every time when the NIFTY will approach this zone, it will remain vulnerable to volatile movements and profit taking bouts. However, in the same breath, it is important to note that there has been divergence in lead indicators. This means that though there can be some time that the Markets may consolidate but it is also clearly showing good amount of steam left in it.

Overall, as of now, given the structure of the Charts and F&O data read along with lead indicators, we feel that overall up trend is likely to persist. We will see Indices scaling higher levels but at the same time it will not be without volatile oscillations and profit taking bouts. However, in a broader scenario, we advise remaining light on over all positions and in fact make select purchases with corrective declines. Expiry too will dominate as we enter the expiry of the current derivative series and today being the last trading day of the week may keep caution levels somewhat high.

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 

Daily Market Trend Guide -- Wednesday, February 22, 2017

MARKET TREND FOR WEDNESDAY, FEBRUARY 22, 2017
While trading precisely on analyzed lines, the Indian Equities ended the day with gains as the benchmark NIFTY50 closed higher with 28.65 points or 0.32% after spending more than half of the session on a flat note with minor losses and recovering in the final hour and half of the trade. With this, the NIFTY has made its intent clear and we expect the momentum to continue. We expect the NIFT to march towards our initially analyzed targets of 8950-8970 zones and at the same time we will have to remain ready to handle increased volatility as the NIFTY approaches its major Double Top resistance area. Today, a flat opening is expected and as we attempt to move towards 8950-mark, we expect large amount of volatility to creep in as well. . The INDIA VIX not reporting fresh low even with NIFTY scaling higher is a clear sign of heightened cautiousness.

For today, the levels of 8935 and 8960 will act as immediate resistance levels. The Supports come in at 8865 and 8780 levels.

The Relative Strength Index – RSI stands at 73.3654 and it continues to trade in “Overbought” territory. The NIFTY has continued to set a fresh 14-period high while RSI has not and this has once again resulted into Bearish Divergence. The Daily MACD continues to remain bearish while trading below its signal line. No major formations are observed on Candles.

The rollovers were evident as the NIFTY February series shed over 54.22 lakh shares or 24.99% in Open Interest. The March series added over 62.24 lakh shares or 114.19% in Open Interest. There is net addition in Open Interest which shows likely continuation of upward momentum.

Going through pattern analysis, the NIFTY has approached its Double Top resistance levels at Close near 8943. This level is expected to act as major pattern resistance which NIFTY continues on its way up. So, 8945-8970 zones collective has more than one pattern resistance and are likely to induce lot of volatility as we approach these levels.

As the Markets near its major pattern and area resistance levels on both Daily and Weekly 
Charts, given the present structure of the Charts, need of the hour demands very heightened level of caution. The way we advice not to short given the buoyant undercurrent, in the same breath, we heavily suggest to protect profits with each up move now and remain braced for heavy volatility in the Markets. Also as we have short week ahead with Friday being a holiday, and as we enter the penultimate day of expiry of current series, volatile environment is all likely to persist. State of high caution is advised for the day along with remaining light on positions.

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 

Daily Market Trend Guide -- Tuesday, February 21, 2017

MARKET TREND FOR TUESDAY, FEBRUARY 21, 2017
In our previous note, we had projected high probability of the benchmark NIFTY50 resuming its up move and heading higher; and keeping in line with this and fuelled by a secular broad based buying, the NIFTY ended the day at its 5-month high gaining 57.50 points or 0.65%. The not-so-classic Tweezers that have formed may make the Markets work little harder than required but the benchmark is heading towards its logical targets of 8950-8970 levels wherein it is likely to take some breather. Today, we expect a modestly positive start but at the same time, expect some volatility to creep in as me move ahead in the session. The overbought nature of the Markets once will remain a cause of caution but at the same time, we can expect liquidity to continue to chase the Markets.

For today, the levels of 8905 and 8950 will act as immediate resistance levels to the Markets. The supports come in at 8825 and 8750 levels.

The Relative Strength Index on the Daily Chart is 71.9552. Though NIFTY has set a fresh 14-period high and RSI has not, this has resulted once again into Bearish Divergence. The Daily MACD remains bearish while it trades below its signal line. On the Candles, not-so-classic formation that resembles to Tweezers has occurred. In the present context, it will have relatively less significance. The only probability is that it can once again pause the up move but at higher levels. This requires confirmation on the following day.

The NIFTY February series have shed over 25.59 lakh shares or 10.55% in Open Interest. The March series added over 23.06 lakh shares or 73.35% in Open Interest. There is a mild reduction in Open Interest which might have resulted upon squaring up of shorts from lower levels. However, for any sustainable up move this will need to be replaced by fresh longs.

The pattern analysis shows NIFTY advancing towards its logical targets of 8950-8970 zones. These levels are one of the major area resistance levels for the Markets and also represent Triple Top formation on the Weekly Charts. They way advancement of NIFTY towards these levels is distinctly possible, in the same breath, NIFTY taking some breather and witnessing some profit taking at higher levels is equally probable.

Overall, with the expected positive start to the Markets, we will continue to see positive trade at least in the initial session and will see liquidity chasing the Markets. However, the overbought nature of the Markets, the fatigue on the lead indicators and the NIFTY approaching its major pattern resistance should not be overlooked. All future advances until 8950 levels should be utilized in protecting profits at higher levels. Positive caution 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 

Daily Market Trend Guide -- Monday, February 20, 2017

MARKET TREND FOR MONDAY, FEBRUARY 20, 2017
The benchmark NIFTY50 on Friday saw a gap up opening but settled with net gains of 43.70 points or 0.50% after coming off from the opening highs. Today, we expect a directionless opening to the Markets in the initial trade. The NIFTY has placed itself at a very critically important juncture. On one hand, it has attempted an upward breakout after nearly seven days of consolidation and on the other end; it has closed very near to the critical resistance area of 8820-8830 levels. The opening levels, therefore, will be greatly important and if the NIFTY manages to trade above these 8820 — 8830 zones, it will trade with an upward bias though the intraday trajectory will remain crucial. If the NIFTY trades below 8820-8830 levels, it will push itself again into short term consolidation. The behavior of the NIFTY vis-à-vis the 8820-8830 zone, therefore, will remain very crucial to watch for.

For today, the levels of 8830 and 8905 will act as immediate resistance levels for the Markets. The supports will come in at 8765 and 8690 levels.

The Relative Strength Index – RSI on the Daily Chart is 68.8852 and it does not show any failure swings. The NIFTY has formed a fresh 14-period high while the RSI has not and this has resulted into Bearish Divergence. The Daily MACD remains bearish while trading below its signal line. On Candles, a rising window has occurred. Though this is a gap up bar and indicates bullish continuation, but this formation if read in the current context may push the Markets into some consolidation for very short time.

On the derivative front, the NIFTY February series has shed over 3.66 lakh shares or 1.49%. This indicates that some profit taking has taken place post gap up opening in the previous session.

Coming to pattern analysis, the NIFTY has poised itself at a critical juncture. Post consolidation that lasted nearly seven sessions, the NIFTY saw a gap up opening which could have otherwise led to a positive breakout on the Daily Charts. However, the opening levels in the previous session coincided with the major area resistance levels on the NIFTY’s Weekly Chart and the Markets saw some profit taking at higher levels. With the NIFTY ending very near to its congestion zone resistance of 8820—8830, if the NIFTY trades  below  this level then some consolidation for some short time cannot be ruled out.

All and all, even with the likelihood of the NIFTY consolidating for some more time  if it trades below 8820-8830 zones, the undercurrent remains strong and the overall trend remains intact. We still continue to advice to keep overall exposure limited and light but selective purchases may be continued to be made. Any major short selling should be avoided as there are no signs of the NIFTY marking any immediate top. Overall, positive caution is advised for today.

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 

Sunday, February 19, 2017

WEEKLY MARKET OUTLOOK FOR FEBRUARY 20 THRU FEBRUARY 23, 2017

WEEKLY MARKET OUTLOOK FOR FEBRUARY 20 THRU FEBRUARY 23, 2017
The Week ending on Friday remained quite eventful as the benchmark NIFTY50 saw good amount of volatile swings during the Week but ended flat with nominal gains of 28.15 points or 0.32% on Weekly basis. We had mentioned in our two previous Weekly notes about possibility of NIFTY testing the 8900-mark. This week, with the Weekly high of 8896.45, NIFTY just fell short of this level. In the coming Week, we see some signs of exhaustion on the Weekly Charts. We might see some up ticks in the coming trading days but some consolidation from higher levels cannot be ruled out. The coming Week being expiry week and also a short one with Friday being a trading holiday is likely to prevent the Markets from posting any runaway rise. However, the undercurrent remains very much in tact and we certainly expect the benchmark to test the 8900-8950 zones as it approaches its Double Top resistance zone.

In the coming week, the levels of 8900 and 8975 will pose stiff resistance to the Markets. The supports come in quite lower at 8765 and 8680 levels.

The Relative Strength Index – RSI on the Weekly Charts is 63.1843 and it has reached its highest value in last 14-period which is Bullish. The Weekly MACD remains bullish while it continues to trade above its signal line. On Candle, a Doji Star has occurred. If we read this formation in the present context and the structure of the Chart, though it may not signal a reversal but is likely to push the Markets in some more consolidation. However, this will require confirmation on the next bar.

The  pattern analysis show  the Markets clearly approaching it Double Top formation and approaching its most recent highs formed in the last quarter of the year 2016. If we take a broader look, NIFTY is in fact forming a TRIPLE TOP formation. This formation is valid if we also take in to account the top formed early 2015 which is slightly away. Further important indication of a buoyant undercurrent is that the third top is formed with a significantly higher bottom by NIFTY. Therefore, while the NIFTY adjusts itself and deliberates a bit in form of a range bound consolidation, overall trend remains intact from all possible angles.

Overall, though we certainly expect the coming week to be volatile, we do not see  any significant corrective activity coming place. The way the Charts show possible broad ranged consolidation, it also indicates some more underlying steam left in the Markets. We advice to keep the overall positions very light given the expiry week and the long week-end, we reiterate to use the consolidation time in making select quality purchases. However, given the present scenario, some evident sector rotation will hold the key in successful stock selection. Cautious approach is advised for the coming week.

A study of Relative Rotation Graphs – RRG clearly show that the IT Stocks, though after putting up stunning and resilient performance over previous week, will continue to lose momentum. Individual performance will dominate but the momentum is likely to remain less as compared to Markets in general. The REALTY pack will continue to improve its relative outperformance and this is also likely to induce relative outperformance in housing finance companies as well, though on very selective note. SMALL CAP universe will show further gain in momentum. INFRA stocks will also lead the up move, if any and will remain resilient to the corrective downsides, if any. We will see some distinct outperformance from select FMCG Stocks as well. While METAL and ENERGY pack will continue to weaken on week on week basis, we might see some consolidation from the PSUBANK stocks. While PHARMA is likely to lag as a sector, select performance from participants of MIDCAP and NIFTYJR pack cannot be ruled out.

Important Note: RRG™ charts show you the relative strength and momentum for a group of stocks. In the above Chart, they show relative performance as against NIFTY Index and should not be used directly as buy or sell signals.

(Milan Vaishnav, CMT, is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)

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 



Daily Market Trend Guide -- Friday, February 17, 2017

MARKET TREND FOR FRIDAY, FEBRUARY 17, 2017
The Equity Markets had a somewhat positive session yesterday as the benchmark NIFTY50 rebounded from the intraday lows after a initial soft opening and ended the day with modest gains. Today, we expect a positive start and expect the positivity to persist at least in the initial trade. In yesterday’s session, NIFTY established two things. First, it defined the consolidation zone of 8675-8820 and also held out the importance of the 8820-8830 zones as immediate resistance levels as well. Even if we see some up moves, the 8820-8830 zones will continue to hold out as important hurdle for the NIFTY. We will not see any sustainable resumption of up move until these levels are moved past and until this happens, consolidation will continue to persist.

For today, 8830 and 8895 will pose resistance to the Markets. The supports come in lower at 8720 and 8650 levels.

The Relative Strength Index – RSI on the Daily Chart is 66.2802 and it remains neutral as it shows no bullish or bearish divergence as against the price or any failure swings. The Daily MACD is bearish post reporting a negative crossover yesterday. No significant formations are observed on candles.

The NIFTY February futures shed over 4.71 lakh shares or 1.88% in Open Interest. This signifies that short covering occurred post soft opening which led to the rally in the NIFTY. It would be critical to see that such short covering continues and it is eventually replaced with fresh longs in the system.

The pattern analysis now clearly defines a congestion zone. Post halting the up moves in the 8820-8830 area, the NIFTY fiercely consolidated at Close levels for nearly six sessions and then posted some minor losses. In this manner, the 8820-8830 zones established itself as a immediate short term resistance and the bouncing back of the Markets from the supports of 8700-8720 established the lower support area for the NIFTY. So long as the consolidation continues, we will see the NIFTY oscillating between 8675-8725 on the lower side and 8820-8830 zones on the upper side.

All and all, we expect some up move to continue in the Markets but at the same time, the levels of 8820-8830 will continue to pose resistance to the Markets. As mentioned earlier, for a fruitful and sustainable up move, the levels of 8820-8830 need to be breached on the upside. The positivity is likely to be aided by softening of the bond yield and better performance in the overall global equity set up. Stock specific purchases will be seen. Adopting stock-specific and selective approach with positive bias 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 

Daily Market Trend Guide -- Thursday, February 16, 2017

MARKET TREND FOR THURSDAY, FEBRUARY 16, 2017
The Indian Equities traded precisely on projected lines and after fierce consolidation at close levels, it saw some correction as well while it ended the day with a loss of 67.60 points or 0.77%. It becomes important to note at this juncture that this corrective activity was imminent and long overdue and in fact will turn out to be  healthy for the Markets going ahead. Today, we can expect a subdued opening and the spiking of the US Bond Yields may still have its lingering effect on Indian Equities but in the immediate short the Markets have limited downsides and may turn up again after brief corrective action. While a subdued opening is expected, Markets are likely to find strong supports at lower levels and might improve as we go ahead in the session. Resilience is expected for the Markets and more so given the buoyant set-up of the correlated peers as well.

For today, the levels of 8775 and 8830 will continue to act as immediate resistance levels. The supports will come in at 8690 and 8665 levels.

The Relative Strength Index – RSI on the Daily Chart is 62.7479 and it has just crossed below from a topping formation. Also it has reached its lowest value in last 14-periods which is Bearish. A Bearish Divergence is also seen as the RSI has set a fresh 14-period low while the NIFTY has not yet. The Daily MACD has reported a negative crossover and it now trades below its signal line. We had projected this happening in our yesterday’s note.

On the other hand, the NIFTY February futures have added over 17.40 lakh shares or whopping 7.45% in Open Interest which very clearly indicates creation of massive short positions in the system.

The pattern analysis paints a obvious picture. After oscillating in a broad range and with flat endings at Close levels, the NIFTY was witnessing fierce consolidation over last six sessions. Some corrective activity was imminent as the NIFTY was also trading in overbought terrain during this time. Any up move without any correction would have taken Markets higher but would have made them equally unhealthy. The corrective action that we witnessed yesterday will in fact prove to be healthy for the Markets in the immediate short term.

All and all, though the lead indicators show some persistence of weakness and some amount of pressure may also persist because of spike in US Bond Yields in last two sessions, we expect limited downsides to the Markets. Any downsides that we may see might be temporary as the NIFTY has added huge amount of shorts over last two days. While remaining light on overall positions, we also advice refraining from creating any major short positions as short squeeze may occur at lower levels. While maintaining cash and liquidity, modest purchases may be made at lower levels.

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 

Daily Market Trend Guide -- Wednesday, February 15, 2014

MARKET TREND FOR WEDNESDAY, FEBRUARY 15, 2017
The Indian Equity Markets continued to fiercely consolidate for the sixth day in a row and went on to once again end the day with minor loss of 12.75 points or 0.14%. Today, as we open, there are all chances of a modestly negative opening. Despite great amount of strength is displayed at Close levels, the NIFTY also faces the surge in the US Dollar with its trading at a 3-week high and the spike in the Treasury Bond Yields. With these readings, we can also not dismiss the fact that the NIFTY still continues to trade in overbought territory.  This can continue to infuse volatility once again in the session. There are chances that we may see some pressure in the opening trade but also display resilience as we go ahead in the session.  The behavior of the Markets vis-à-vis the levels of 8230 will continue to remain immensely important.

For today, the levels of 8230 and 8900 will continue to act as immediate resistance levels for the Markets.  Supports come in lower at 8730 and 8650 are expected to act as immediate supports.

The Relative Strength Index – RSI on the Daily Charts is 71.5783 and it remains neutral showing no bullish or bearish divergence. The Daily MACD is still bullish while trading above its signal line. But it is now evidently moving towards reporting a negative crossover. No significant formation on the Candles is observed.

The NIFTY February futures have added yet another over 10.32 lakh shares or 4.63% in Open Interest.

While having a look at pattern analysis, we can see the strong consolidation happening on the Daily Charts at Close levels. In the last six days, we have seen NIFTY ending with minor changes but the sessions have witnessed good amount of volatility with NIFTY oscillating quite a bit on either side. Normally such behavior is interpreted as strong undercurrent. 

However, taking into account global technical indicators such as strengthening of the US Dollar and the spike in the US Bond yields, we cannot rule out the possibility of the NIFTY continuing to remain in such consolidation for some more time. In the present circumstances, the levels of 8220-8230 will remain very critical levels to watch out for.

All and all, we can expect a subdued opening and might see some negativity in the initial trade but at the same time, we cannot rule out some resilience coming at play. Such behavior is likely to induce volatility in the session. Any sustainable up move shall occur only after the NIFTY moves past the 8220-8330 zones and until this happens we will continue to see volatile oscillations of the NIFTY in a defined range. While remaining light on the overall positions, cautious 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 

Daily Market Trend Guide -- Tuesday, February 14, 2014

MARKET TREND FOR TUESDAY, FEBRUARY 14, 2017
The Markets ended fifth day in a row under fierce consolidation while it ended with nominal gains of 11.50 points or 0.13% post seeing a remarkable recovery from the lows of the Day. The NIFTY50 is witnessing strong consolidation on Close basis with flat endings while oscillating in a broad range on intraday basis. While this indicates very strong undercurrent, it has also established 8820-8830 zones as its immediate very short term resistance. With each passing day under consolidation, Markets are increasing its chances of a sharp move on both side and any movement past 8820-8830 zones will see some more up move despite the fact that the Markets continue to trade in overbought trajectory.

For today, the levels of 8830 and 8900 will continue to act as major immediate resistance levels while supports come in at 8730 and 8675 levels.

The RSI—Relative Strength Index on the Daily Chart is 73.3871 and it does not show any failure swing. It continues to trade in “overbought” terrain and also reports a Bearish Divergence as the NIFTY has set a fresh 14-period high while RSI has not. The Daily MACD is still bullish while trading above its signal line but as mentioned in our previous notes as well, it is moving towards reporting a negative crossover post flattening its trajectory. On the Candles, a long lower shadow occurred. This formation resembles a hanging man baring the fact that it has some upper shadow as well. Such formations often cause the Markets to consolidate while halting its up move. Such and similar formations have occurred couple of times over past five sessions and has caused the Markets to undergo strong consolidation after pausing the up move.

The NIFTY February futures have added over 6.32 lakh shares or 2.92% in Open Interest. This signifies buoyant undercurrent in the Markets.

The pattern analysis show quite distinctive and classical consolidation on the Daily Charts. 
On the Closing basis, the Markets have remained nearly flat in last five days by posting nominal gains or losses and remaining more or less flat. While intraday, the sessions have remained quite volatile in a broad range as it saw NIFTY oscillating on either side. Such behavior often signifies strong undercurrent in the Markets and after spending some time under such congestion, Markets usually makes and upward move.

Overall, if the NIFTY moves past 8820-8830 zone, it may see some more up move towards 8900-mark despite the fact that it trades overbought. Strong Markets tend to get overbought and remain overbought for some time. However, the behavior of the Markets vis-à-vis the levels of 8820-8830 zones and the intraday trajectory that it forms during the day will be critical to watch out for. The strong global equity set up is likely to aid the attempt of our Markets to move up. However, given the overbought nature of the Markets, fresh purchases may be made but also guarded equally vigilantly at higher levels.

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 

Daily Market Trend Guide -- MONDAY, FEBRUARY 13, 2017

MARKET TREND FOR MONDAY, FEBRUARY 13, 2017
The NIFTY on Friday headed nowhere as it traded 20-odd points range, oscillated on either side and finally ended the day with nominal gains of 15.15 points or 0.17%. Today, we expect the Markets to open on a positive note and look for directions. However, just like entire previous week, the NIFTY50 continues to remain overbought and therefore any runaway sustainable rise may not be expected. Any up move or upward spike will, therefore, continue to remain vulnerable to profit taking pressures from higher levels.

For today, the levels of 8825 and 8900 will act as immediate resistance levels while supports will come in at 8710 and 8650 levels.

The RSI—Relative Strength Index on the Daily Charts is 72.8117 and it remains neutral showing no divergences against the price. However, it trades in overbought territory. The Daily MACD has flattened is trajectory but it is bullish as it trades above its signal line. 
However, it is moving towards reporting negative crossover. No significant fresh formation on Candles is observed. However, in previous sessions, an engulfing bearish line followed by a long lower shadow has effectively halted the advance.

The NIFTY February futures have shed just over 75, 525 shares or nominal 0.35% in Open Interest. This figure is too small and insignificant to individually points towards change in any underlying sentiment.

The pattern analysis presents a cautious picture as the NIFTY had been tracking the upper Bollinger band while remaining in overbought territory. Such structure usually results in some short term consolidation or minor correction. Furthermore, even if we see some upward move in NIFTY, it will then lead the Markets towards important pattern resistance levels on the Weekly Charts. This movement along with the overbought nature of the Markets will prevent any runaway rise from occurring.

Overall, we advise to continue to approach the Markets will great caution. Up-moves may be there but they will not be without the vulnerability of profit taking bouts. The Overbought nature of the Markets are primarily likely to prevent any runaway up moves but if such up moves occur, then the sustainability of the higher levels will be in question. Therefore, continuance of approaching the Markets with great caution along with adopting stock specific approach 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