Sunday, February 19, 2017

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 

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