MARKET TREND FOR WEDNESDAY, OCTOBER 25, 2016
Markets headed nowhere yesterday and while remaining in a
capped range, the NIFTY ended the day with minor losses while resisting
precisely to the upper trend line of the falling channel drawn from 8968
levels. Today as well, we can expect a mildly negative start to the Markets and
the levels of 50-DMA and the pattern resistance of the falling channel will
continue to pose resistance to the NIFTY today and in coming sessions as well.
Further, we enter the penultimate day of the expiry of the current series and
we will continue to see the Markets in general remaining dominated with rollover
centric activities.
For today, the levels of 8710 and 8745 will continue to act
as immediate resistance levels. The supports will come in at 8650 and 8620
levels.
The RSI—Relative Strength Index on the Daily Chart is 50.0686
and it remains neutral as it shows no bullish or bearish divergence or any
failure swing. The Daily MACD is bullish as it trade above its signal line.
On the derivatives front, the NIFTY October series shed over
25.69 lakh shares or 15.48% in Open Interest. The November series added over
34.43 lakhs shares or 64.07% in OI resulting into net addition in the Open
Interest.
While having a look
at pattern analysis, the NIFTY has been resisting to the 50-DMA which is 8710
and also to the trend line drawn from 8968 levels. There is a falling channel
that has appeared and NIFTY has been resisting to the falling trend line drawn
from the 8968 levels. The 50-DMA now also coincides with this pattern
resistance and therefore the levels of 8710-8720 will continue to pose
resistance at Close levels as well. Until the NIFTY moves past 8750, there won’t
be any resumption of up move visible in the Markets.
Overall, there has been lack of conviction seen in the
participants and the NIFTY has not be able to move past its critical resistance
zones. Until this happens, we will continue to see NIFTY trading in a range and
heading nowhere. Volatility will remain ingrained in the Markets and we
continue to reiterate to protect profits at higher levels as all upsides will
remain vulnerable to intermittent selling bouts.
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
http://milan-vaishnav.blogspot.com
+91-98250-16331
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