Thursday, January 5, 2017

Daily Market Trend Guide -- Thursday, January 05, 2017

MARKET TREND FOR THURSDAY, JANUARY 05, 2017
Classical consolidation continued in the Indian Equities as the NIFTY remained in a very narrow range and ended the third day in a row on a flat note. It ended with marginal loss of 1.5 points or 0.02%. Today’s session is likely to remain on similar lines. We are likely to see a modestly positive start to the Markets and the analysis for today, therefore, remains on similar lines. The NIFTY has been resisting to its 50-DMA. Therefore, 50-DMA which stands at 8216 and 200-DMA which stands at 8271 remain critical levels to watch for in coming days.

For today, the levels of 8220 and 8270 will remain resistance levels for the NIFTY. The supports are likely to come in at 8135 and 8105 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.0082 and this remains neutral as no bullish or bearish divergence are seen. It does not show any failure swings either. The Daily MACD is bullish as it trades above its signal line. On the Candles, no significant formations are seen.

On the derivative front, the NIFTY has added yet another 2.99 lakh shares or 1.74% in Open Interest. While the NIFTY is consolidating, it is adding net OI which is a positive sign.

The pattern analysis suggest a clear formation of the trading range post the Markets taking support in the 7900-7920 zones. It took support twice near these levels forming a Double 
Bottom support and it now trades currently on the higher side of the established trading range. As of now, it trades below its 50-DMA and 200-DMA and until the NIFTY trades below this level, it is likely to remain under consolidation. For a fresh sustainable up move to occur, NIFTY will have to move past these important pattern resistances.

It is important to note that after the pullback of nearly 300-odd points, the NIFTY has not shown any retracement and is ending on a flat note at Close levels. This is clear indication of inherently positive bias in the Markets. However, until the Markets moves past the mentioned critical levels, we might see it continue to consolidate in broad range. However, the downsides will remain absolutely limited but some amount of volatility will remain ingrained. All lead indicators, F&O data and the current structure of the Charts point towards positive bias.

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 

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