Monday, October 24, 2016

Daily Market Trend Guide -- Tuesday, October 25, 2016

MARKET TREND FOR TUESDAY, OCTOBER 25, 2016
The Markets on Monday traded exactly on analyzed lines. They continued to exhibit positive bias but also resisted to the 8710-8740 levels while it ended the day with minor gains. Today we keep our analysis on similar lines as the NIFTY is likely to continue to resist to 8740 levels which is a important pattern resistance as well. Markets also have a news developments at Tata Group as well to which it might react with a knee jerk reaction. However, in the long run, these developments will be viewed as a proactive actions from a sensitive Board in the general interest of the stakeholders at large.

For today, the levels of 8740 and 8775 will act as immediate resistance levels. The supports will come in at 8650 and 8625 levels.

The RSI—Relative Strength Index on the Daily Chart is 51.4669 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD has reported a bullish crossover and it now trades above the signal line.

On the derivative front, some rollovers were witnessed as NIFTY October futures shed over 16.30 lakh shares or 8.94% in Open Interest while November futures added over 19.15 lakh shares or 55.36% in Open Interest resulting in to net addition in the OI.

While we have look at the pattern analysis, the NIFTY continued to resist to the upper trend line of the falling channel that the NIFTY has formed from the previous highs of 8968 level. Having said this, it has also been resisting at Close levels to the 50-DMA level which is 8709. With the NIFTY exhibiting positive bias, any move beyond 8740-50 zones will see the NIFTY making hard attempts to resume its up move. The reading of lead indicators and F&O data support this view as well.

Overall, though will might still witness some intraday volatility and choppiness and even minor declines, the inherent trend of the NIFTY continues to remain strong and it is likely to show resilience to any possible downside dips. Though some intermittent selling bouts cannot be ruled out, Markets will be seen making efforts to resume its up move and show good amount of resilience to downsides. While all dips should be continued to be utilized to make fresh purchases, cautious optimism 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
Association of Technical Market Analysts, (ATMA), INDIA



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